A proposed European law sows concern in the world of cryptocurrencies, Cryptocurrencies

Satoshi Nakamato’s project was based on the idea of ​​anonymity. The mysterious creator under the pseudonym Bitcoin wanted to give everyone the opportunity to exchange currency without intermediaries. On its network, “the public can see that someone is sending an amount to another person, but without information linking that transaction to anyone”, he wrote in his creed from 2008. Anyone can observe the stories and their activity, so it’s more about “pseudonymity” than “anonymity”. Holders hide behind a nickname (their account number), but it is impossible to know their identity if they do not reveal it. That is truly the concern that worries the European Union.

The ability to reveal an identity

The Committee on Economic and Monetary Affairs is thus working on a new regulation, which will make it possible to see more clearly. It will meet on Thursday, 31 March, to vote on the text and its amendments. But it is not without arousing a wave of panic among professionals and several proprietors who see it as a desire to question the very spirit of cryptocurrencies. What particularly bothers them is the ability (1) for centralized platforms to request the identity of the recipient or sender of a transfer, even for a “non-hosted wallet”.

Cryptocurrency holders can actually store their tokens either on a platform with a “hosted wallet” or themselves on a “non-hosted wallet” (technically, the wallet is always hosted somewhere, but let’s move on). In the latter case, it is more common to say that the individual has his own private key. If the platforms today have integrated know-your-customer procedures, they are not necessary and can not be imposed on “non-hosted portfolios”.

On the other hand, companies that manage “hosted wallets” may be forced to request information during transfers. This is the European project, which also wants the platforms to oppose the operation when the data seems inaccurate, or even transfer it to the authorities or keep it at their disposal. In summary, if a “non-hosted wallet” makes a one-time transfer with a “hosted wallet” and reveals their true identity, then it may be enough for the authorities to find out.

Twitter turns on

“Like bank transfers, transfers of crypto such as Bitcoin should be accompanied by information about the person sending or receiving the money.justifies MEP Paul Tang. So the identity of a non-hosted wallet account requires verification, just like when you identify yourself at the bank for a deposit. »

He reacted strongly to a message from the expert Patrick Hansen, who spotted the information and wanted “sound the alarm” on Twitter.

Other industry representatives have followed suit, such as Brian Armstrong, CEO of the major US platform Coinbase : “It is important that we continue to push back against bad cryptocurrencies.”

Also protested by the figures from the KPMG Cabinet, Alexandre Stachchenko and Claire Balva:

There is no doubt that Thursday’s vote will be followed closely. A few weeks ago, a change in the MiCA regulation (Market in Crypto Assets), which planned to ban mining for certain blockchains, including Bitcoin and Ethereum, was rejected after strong pressure from professionals.

(1) Draft report on the proposal for a regulation of the European Parliament and of the Council on information accompanying transfers of funds and certain cryptocurrencies, see in particular amendments 68 to Article 18a, 15 to Articles 27ter and 52 to Article 14.

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