European Union passes crypto rules aimed at tracking all trades
Despite fierce industry opposition, the EU Parliament passed new rules that will require crypto exchanges to track and report all trades when requested.
The European Union Parliament has passed new cryptocurrency regulations that outlaw anonymity in even the smallest crypto transactions in a move that can be construed as an invasion of privacy.
The new rules aim to replicate the ambit of the anti-money laundering framework for conventional financial transactions that exceed EUR 1,000 (around Rs 84,000) but for all crypto trades.
Additionally, the biggest losers will be those who use private or unhosted crypto wallets as they will be cut off from the European crypto ecosystem if they are not unable to identify and track them effectively.
The parliament has further measures to discuss, including cutting off unregulated exchanges from the entire European financial ecosystem.
However, the centre-right European People's Party (EPP) opposed these new sanctions.
“Such proposals are neither warranted nor proportionate. With this approach of regulating new technologies, the European Union will fall further behind other, more open-minded jurisdictions,” said Markus Ferber, an EPP spokesperson, to Coinbase.
Earlier this year, India also added new regulations for the crypto industry, including a 30 percent capital gains tax and a 1 percent TDS on every transaction, which will similarly disenfranchise unhosted wallets as the new EU rules.
According to legal experts, these rules could face challenges in court for privacy violations, while Coinbase — one of the world's largest cryptocurrency exchanges — has led the industry condemnation of these new rules.
“This revision would unleash an entire surveillance regime on exchanges like Coinbase, stifle innovation, and undermine the self-hosted wallets that individuals use to securely protect their digital assets,” said Paul Grewal, Chief Legal Officer, , in a blog post.
“The truth is that digital assets are, in general, a markedly inferior way for criminals to hide their illicit financial activity," he continued.
For the rules to be implemented into law, the national ministers and the EU parliament must agree to them.
Edited by Suman Singh