EU is set to delagalise decentralised mixers

[pawel7777]

Topic says it all, in a not so unexpected move, the European Union pass the vote to ban mixing services and force crypto-business to implement more surveillance on their customers as part of the Anti-Money Laundering Regulation (AMLR).

Link1:
https://www.consilium.europa.eu/en/press/press-releases/2024/01/18/anti-money-laundering-council-and-parliament-strike-deal-on-stricter-rules/
Link2:
https://www.mapsplatis.com/news/crypto-assets/the-european-union-is-set-to-outlaw-decentralised-mixers-and-compel-cryptocurrency-firms-to-closely-monitor-users-dealing-a-significant-blow-to-the-anonymity-offered-by-decentralized-finance-defi/

In short:
- crypto-firms will be compelled to collect more data on users;
- anonymity services tools will be banned.

The legislation also prohibits the use of tools that enable anonymity, including privacy tokens. Additionally, offering crypto-mixing services, which obscure transaction history, will no longer be permitted. Obliged entities are required to verify the identity of users, monitor transactions, and gather more information about both senders and recipients.

For crypto transfers below €1,000, service providers must conduct basic KYC to authenticate their users. However, for transactions exceeding €1,000, customer due diligence measures are necessary, involving longer-term monitoring of user behavior and identity in addition to the standard KYC.

Apparently there was also an initiative to force offline wallet providers (aka non-custodial wallets) to do KYC checks on their users, but that was dropped. I suspect it could've been a tactic when they propose something ridiculous, so when it gets rejected people see it as a win and are no longer angry about all the other restrictions that have been passed.

As far as I understand all this, offering mixing services will be illegal, but using such services will not be outlawed.

[Lucius]

This is a completely logical sequence of events, considering that the EU, like the US, is very aggressive towards everything that is decentralized, and what's more, profitable. Everything they do actually leads to the complete establishment of control when it comes to cryptocurrencies, while on the other hand they completely turn their heads from the hundreds of billions that are laundered through banks and tax havens around the world.

All that they are doing will probably discourage part of the users who will give up investing in cryptocurrencies, while the rest will be treated as potential criminals in every transaction they want to make.

[ABCbits]

EU so quickly follow US action this time. I also wonder what counts as "tools that enable anonymity" in eyes of EU. Without clear definition, wallet which support using Tor connection could be covered.

All that they are doing will probably discourage part of the users who will give up investing in cryptocurrencies, while the rest will be treated as potential criminals in every transaction they want to make.

Or at least they want force people to invest on cryptocurrency through 3rd party. After all, Bitcoin ETF already exist on some Europe country.

[Lucius]

EU so quickly follow US action this time. I also wonder what counts as "tools that enable anonymity" in eyes of EU. Without clear definition, wallet which support using Tor connection could be covered.

The EU has been preparing for this for some time, but considering that such laws must go through the approval procedure in as many as 27 parliaments of national states, it is clear that it takes a very long time. Apart from that slowness or perhaps inefficiency, the EU is not much different from the US, which continues to have a strong influence on European policies.

All that they are doing will probably discourage part of the users who will give up investing in cryptocurrencies, while the rest will be treated as potential criminals in every transaction they want to make.

Or at least they want force people to invest on cryptocurrency through 3rd party. After all, Bitcoin ETF already exist on some Europe country.

The goal is to make investing in cryptocurrencies more difficult because everyone will have to undergo much more rigorous controls, which is not pleasant for anyone. However, it remains to be seen how all EU member states will react to this law, because even though there are laws that prevent money laundering through cryptocurrencies, not all member states apply them in the same way.

[TomPluz]

As far as I understand all this, offering mixing services will be illegal, but using such services will not be outlawed.

It means we can still use those mixing services but since operators are not allowed to provide such services then we will be left with no other option but to surface above and not anymore enjoy a greater level of anonymity. Actually this move by the European Union is nothing surprising at all as even the United Sates is also at war with Bitcoin mixers and many had been charged with money laundering charges before. I am expecting that there will be more restrictions coming from EU as it is at war with privacy in the name of going after funding for terrorism and again money laundering practices. What is so clear here is that the government is really at odds with anything that empower the people away from the prying eyes of them and they hate the idea that control has been reduced due to crypto-related technologies and options. Unfortunately, there is no stopping with this war and will only escalate for more.