On the 29th of June, the European Commission agreed on imposing stringent rules for crypto users in Europe. The new rule will require all crypto users to perform KYC verifications for fund transfers. While this rule has always been in place for centralized exchanges, the EU Commission wishes to extend the KYC rule to decentralized platforms.
Speaking on the new KYC law, a representative of the European Commission stated:
“After months of negotiations with the Council, we agreed on the most ambitious travel rule transfers of crypto-assets in the world. We are putting an end to the wild west of unregulated crypto, closing major loopholes in the European anti-money laundering rules.”
The implementation of this rule will require crypto users to verify their ownership of a wallet before receiving funds. Centralized exchanges will now be able to place a hold, on funds received from unverified wallets. Additionally, crypto users will be unable to transfer from centralized exchanges to non-custodial wallets, if the receiving wallet has not been verified.
Although the new law is unable to curb peer-to-peer transactions, it will impose friction in the movement of funds. Crypto users will also have lesser privacy than they used to have. Transfer of cryptocurrencies from one user to another will be more difficult.
All transactions valued above a thousand Euros will need to be sent to verified wallet addresses. Wallets that fail to comply with the KYC regulations will be tagged “unhosted.”
Is the European Commission against Bitcoin?
The European Commission has never been a fan of Bitcoin and other digital currencies. Although the new laws were supposedly made to curb fraudulence and money laundering, it seems the Commission just wants a clamp down on crypto activities.
For many years, several governments and institutions have been strongly against Bitcoin. Against all odds though, Bitcoin has stood the test of time. Crypto enthusiasts have no doubts that Bitcoin will survive the latest European laws.