European Parliament approves measure to end anonymous crypto transactions
The European Parliament has given its approval to a ban on anonymous cryptocurrency transactions made through hosted crypto wallets. This move is part of the expanded Anti-Money Laundering (AML) and Counter-Terrorist Financing laws in the European Union. The legislation, which is expected to take effect within three years, also sets limits on cash transactions and anonymous cryptocurrency payments. Under the new rules, anonymous cash payments over €3,000 will be banned in commercial transactions, and cash payments over €10,000 will be completely banned in business transactions.
The ban specifically applies to hosted or custodial crypto wallets provided by third-party service providers, such as centralized exchanges. However, there are concerns that this legislation compromises economic independence and financial privacy. One member of the European Parliament, Patrick Breyer, argued against the ban, stating that the ability to transact anonymously is a fundamental right and that it would have minimal effects on crime while depriving innocent citizens of their financial freedom.
Opponents of the ban argue that unlike cash, cryptocurrency transactions can be traced on the blockchain, making them more transparent. They also highlight that Virtual Assets have minimal relevance to the global financial system, and there is insufficient evidence to support claims of widespread money laundering through cryptocurrencies.
The crypto community has had mixed responses to the EU’s regulatory measures, with some supporting the new AML laws as necessary for combating illicit activities, while others fear they may infringe on privacy and restrict economic activity. Some experts have raised concerns about the impact of the legislation on donations and the broader implications for cryptocurrency use within the EU. Nonetheless, the legislation has been approved and is expected to be fully operational within three years after its entry into force.