The crypto world has reacted angrily to an EU Parliament committee for being on the side of a regulatory package for providing strictness in know-your-customer (KYC) and anti-money laundering (AML) rules for “non hosted” private wallets.
The proposed rules would oblige crypto service providers — most typically exchanges — to authenticate the identity of every person behind an unhosted wallet that communicates with them, and any transaction worth over 1,000 Euros ($1,100) would have to be reported to authorities.
The idea was included in an amendment to the Transfer of Funds Regulation that was approved by the Economic and Monetary Affairs (ECON) and Civil Liberties, Justice, and Home Affairs (LIBE) Committees on March 31.
The new rules must be established through trialogue negotiations between the EU Parliament, European Council, and European Commission, and if they pass unopposed, the crypto business will have nine to 18 months to comply with the legislation.
The chairman and CEO of digital wallet business Ledger, Pascal Gaunthier, did not mince words either, adding that the “EU Parliament chose fear over freedom”: “A new regulation that sets the path for a huge surveillance system over Europe’s financial landscape was just voted on.”
The regulatory news looks to have had a substantial impact on Bitcoin (BTC), with the asset’s price falling 4.5 percent in the last 24 hours to $45,243 at the time of writing. Within the same time frame, Ether (ETH) is down 3.7 percent to $3,282.
European decentralised finance (DeFi) company Unstoppable Finance, criticised the news, expressing optimism that suggestions will be rejected in the next negotiations.
Unstoppable Finance company said on “The revisions are a significant setback for crypto in the EU and should be reversed in the trilogues.”
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