- Misleadingly the European Commissioner for Financial Stability and Financial Services announced that the EU will ban anonymous crypto wallets.
- Multiple media outlets released the story creating massive confusion amongst Crypto users.
The European Commissioner for Financial Stability, Financial Services, and the Capital Markets Union, Mairead McGuinness, announced misleadingly that the EU is banning anonymous cryptocurrency wallets.
The EU believes cryptocurrency is one of the newest ways to launder money and presented an ambitious package of legislative proposals to strengthen the EU’s anti-money laundering and countering terrorism financing rules. However, that does not necessarily mean that anonymous crypto wallets will be banned.
Commissioner’s Statement on Twitter
Mairead McGuinness statement on Twitter made quite a stir by misinterpreting EU Commission proposals. McGuinness and her communications team either misspoke when narrating the new rules to the public, or knowingly misdirected public perception.
Various crypto media outlets were too quick to report on story without a necessary EU proposal check, causing a panic amongst Crypto users.
It is true, money laundering and financial terrorism pose a serious threat to the European economy, financial system and the security of the citizens.
Europol has estimated that around 1% of the EU’s annual Gross Domestic Product is ‘detected as being involved in suspect financial activity’. Hence, this requires the EU to extend AML (Anti Money Laundering) rules to the crypto sector as President of the European Commission Ursula von der Leyen stated.
Clearing Up the Confusion
Rather than a ban on crypto wallets, the EU rules would enforce tighter but defensible rules on money service providers like custody services and exchanges.
The aim of this legislative package is to enhance the detection of suspicious transactions and activities by closing loopholes used by criminals to launder illicit proceeds or finance terrorist activities through the financial system.
The full traceability of transfers of funds could be a particularly important and valuable tool in the prevention, detection and investigation of money laundering and terrorist financing, as well as in the implementation of restrictive measures, in particular those imposed by regulations.
When the regulations come to force, failure to comply with the requirements of payers and payees from payment service providers, as well as intermediary payment service providers, could mean appropriate action is taken to freeze or further restrict the transfer of certain funds. But this will not impact the use of crypto as cash.
The Commission’s proposal states companies that process crypto transactions will have to record their customers’ names, addresses, dates of birth, accounts numbers, and names of the payee. Therefore, crypto users will not be able to fill in their fake crypto information such as addresses for these types of transfers.
On The Flipside
- Anonymous bank accounts are already banned in the EU to help defeat money laundering, so perhaps it is about time to have stricter rules for the crypto.
- As scary as new rules may sound it still does not mean the end of the world. In the end it is a proposal that is coming into force by 2024.
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