EU vote on surveillance of cryptocurrency transactions

The European Parliament is moving towards strong oversight of self-hosted wallets

As a reminder, self-hosted wallets are those that do not depend on a centralized entity to hold cryptocurrencies. We can put in this category “hardware wallets”, such as those offered by Ledger, as well as all those where the user has his own private key.

These wallets are logically little monitored, unlike a wallet offered by an exchange platform. This is not to the liking of certain European legislators, who wish have a look at the cryptocurrencies that pass through these means.

At the beginning of the week, we explained to you that the vote on an amendment on this subject was planned by the ECON Commission. It provided for two strong measures:

  • Information gathering on cryptocurrency transfers by regulated serviceswhatever the amount
  • Monitoring of self-hosted wallets, with regulated platforms that would be required to collect information on the nature of the transfers and the fund holders

Contrary to what we have read here and there, it is therefore not not a ban on self-hosted walletsbut in reality, this would make the work of companies extremely complicated. This of course raises questions of feasibility: how to monitor such transactions, on a large scale? And above all, why would the European Union give itself the right to monitor digital wallets so closely, when it does not do so for other types of transactions?

👉 To go further – Contrary to popular belief, Bitcoin is NOT anonymous…

The monitoring of cryptocurrencies in progress

The vote was validated yesterday in committee, so this is a first step towards more monitoring. As we know, cryptocurrencies are generally already traceable, transactions being recorded in often public registers. This type of measure would therefore be a considerable obstacle to the fluidity of transferss, and poses major logistical problems.

The hope for the ecosystem is that this vote is by no means final. The amendment must be examined and discussed by several bodies of the European Union. The proposal will be put on the table again in mid-April, with a discussion including the European Parliament, the European Commission and the Council of Europe.

This phase should take a few weeks, and will make it possible to introduce changes to the proposal. Nothing is therefore set in stone for the moment, but the vote has shown a desire to go in the direction of surveillance :

Everything will therefore be decided in the weeks to come, and we will see whether changes will be made regarding this project.

👉 More info on this subject – European Union: all cryptocurrency transactions soon to be monitored?

The ecosystem of cryptocurrencies in danger?

As mentioned above, this proposal does not only pose ethical problems. If it were validated, it would be such a brake for the exchange platforms that the smallest could well decide no longer allow transfers to self-hosted wallets. For others, like Binance or Coinbase, this would drastically increase processing costs:

It also means that identifying information such as cryptocurrency holders’ names, addresses, or other sensitive data would be linked to their wallet addresses and all of their transactions on the blockchain.

The crypto industry is currently mobilizing to voice its concerns about this. The measure is not only contrary to the ideals defended by the ecosystem, it could have considerable consequences on its long-term development. We will therefore closely monitor the developments and the next key dates which will give us more indications on the future of cryptocurrencies in Europe.

👉 Read also – Prohibition of mining in Europe: what does the MiCA regulation really say?

Newsletter 🍞

Get a crypto news recap every Sunday 👌 And that’s it.

What you need to know about affiliate links. This page presents assets, products or services relating to investments. Some links in this article are affiliated. This means that if you buy a product or register on a site from this article, our partner pays us a commission. This allows us to continue to offer you original and useful content. There is no impact on you and you can even get a bonus by using our links.

Investments in cryptocurrencies are risky. Cryptoast is not responsible for the quality of the products or services presented on this page and could not be held responsible, directly or indirectly, for any damage or loss caused following the use of a good or service highlighted in this item. Investments related to crypto-assets are risky in nature, readers should do their own research before taking any action and only invest within the limits of their financial capabilities. This article does not constitute investment advice.

About the Author : Marine Debelloir

twitter-soothsayerdatatwitter-soothsayerdata

Deputy editor on Cryptoast, I fell into the pot of cryptocurrencies a few years ago. I am passionate about the innovative technologies that stem from the blockchain and I like to find the most crispy information to share with you.
All items from Marine Debelloir.

Leave a Comment