Bitcoin, Ether, Ripple: MEPs against anonymous payments with cryptocurrencies

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Bitcoin ads: "Just an excuse to get more control over personal data"

Photo: Anthony Kwan/Getty Images

When the EU Commission presented a whole bundle of legislative proposals to combat money laundering and terrorist financing last July, this also included a ban on anonymous crypto "purses", so-called wallets.

All service providers in the industry should be subject to customer identification due diligence, i.e. complete information about the sender and recipient of every transfer.

"Today's changes will ensure that transfers of crypto assets such as Bitcoin can be fully traced," it said at the time,

However, the Commission was willing to grant a de minimis limit.

The due diligence check is only required for credit and financial institutions and providers of crypto services “if they carry out either occasional transactions that represent a money transfer (...) or transfers of crypto assets (...) that exceed EUR 1000 or go beyond, initiate or execute the corresponding equivalent in the national currency,” says Article 15 of the relevant draft.

But this exception could fail in the EU Parliament.

In any case, the rapporteurs of the Committees for Economics and Currency (ECON) and for Civil Liberties, Justice and Home Affairs (LIBE), the right-wing conservative Assita Kanko and the Green Ernest Urtasun, have spoken out against it, as "heise online" reports.

Pirate Breyer: »No noteworthy lowering effects«

In their proposed amendments, they write that criminals could avoid detection "by splitting a large transaction into smaller amounts using multiple seemingly unrelated wallet addresses."

The courses of the cryptocurrencies are “also very volatile”, which is why dealing with a de minimis limit is difficult.

For Patrick Breyer, the member of the German Pirate Party in the European Parliament, this is “just an excuse to get more control over the personal data of EU citizens”.

In his opinion, the step would have “no significant reduction in crime, but would take away the financial freedom of innocent citizens”.

Breyer pointed out that the Russian opposition activist Alexej Navalny, among others, was “increasingly dependent on anonymous donations in virtual currencies”.

He says: "Even online, we have the right to be able to pay and donate without our payment behavior being recorded without cause and on a personal basis."

Mikuláš Peksa, Czech MEP for the Pirate Party, argues that it is "not difficult for criminals to switch to non-EU wallet services, which of course will not implement these regulations".

The position of Urtasun and Kanko is therefore "short-sighted".

Peksa also referred to the generally limited anonymity of cryptocurrency payments, since all transactions are logged in the blockchains, which makes it easier to observe and analyze suspicious transactions.

Technically, nameless transfers are still possible as long as they are carried out directly between two users without an intermediary service provider.

The plenary still has to vote on the final position of the EU Parliament, so it is subject to change.

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