Citing pretext to end all pretexts, “terrorism,” European Union legislators moved Friday, December 15 to impose tighter controls on the world’s most popular cryptocurrency, bitcoin, through trading exchanges and related businesses.
European Union Moves Against Bitcoin
The European Union has updated its landmark 2015 legislation, Fourth Anti-Money Laundering Directive, to include bitcoin and related businesses in its withering two-year-old creation of registering company owners for easier access by EU authorities.
Věra Jourová, European Union Commissioner for Justice, confirmed: “Today’s agreement will bring more transparency to improve the prevention of money laundering and to cut off terrorist financing.”
According to Reuters, “Bitcoin exchange platforms and ‘wallet’ providers that hold [bitcoin] for clients will be required to identify their users, under the new rules which now must be formally adopted by EU states and European legislators and then turned into national laws.”
Bitcoin has been a tear the entire year, causing governments worry about adoption and potential seigniorage loss, as well as taxation hits, more than public pronouncements regarding the digital asset’s use for terror. Nevertheless, the drafted legislation was in direct response to attacks in Brussels and Paris over the last two years, lawmakers claimed.
Deutsche Welle detailed the legislation in five parts: “Requires platforms that transfer bitcoin and ‘wallet’ providers that hold cryptocurrencies for clients to identify users; Limits use of pre-paid payment cards; Raises transparency requirements for company and trust owners; Allows national investigators more access to information, including national bank account registers; Grants access to data on the beneficiaries of trusts to ‘persons who can demonstrate a legitimate interest,’” it explained.
Ireland, Cyprus, Britain, Malta, and Luxembourg all mounted various levels of opposition during negotiations, as these countries in particular are well known to court financial technology companies.
Underscoring less terror and more tax-related concerns, many news outlets also cited revelations contained in the Panama Papers and Paradise Papers, which essentially flouted avoiding EU revenue grabs (celebrities and large companies were outed), embarrassing regulators and legislators alike.
The update has to be ratified by members states and then processed regionally by early 2019.
Will the EU’s new set of rules impact bitcoin?