EU lawmakers back tougher rules on anonymous crypto transactions

EU lawmakers have approved tough new rules which prevent crypto anonymous transactions despite pushback from industry.

Two parliamentary committees yesterday thrashed out cross-party compromises concerning the EU’s framework for digital assets. Proposals requiring crypto firms to identify the parties involved in transactions are poised to proceed to the trialgoue stage, which will see the rules debated by the EU parliament, Commission and Council.

Major players in the crypto space have pushed back against the proposals with the chief executive of crypto exchange Coinbase, Brian Armstrong last night warning the proposal will create a “new crypto surveillance regime,” in Europe.

“Any time you receive 1,000 euros or more in crypto from a self-hosted wallet, Coinbase will be required to report you to the authorities. This applies even if there is no indication of suspicious activity,” Armstrong wrote, criticising the rules for treating crypto holders more harshly than fiat users.

While the Commission had previously proposed applying the reporting rule to transfers worth €1,000 or more under the cross-party agreement the minimum threshold was scrapped meaning all transfers would come under the scope of the rules.

Technologies which provide anonymity to crypto users have come under increased scrutiny from lawmakers amid the conflict between Ukraine and Russia. Global financial watchdogs, including the UK’s Financial Conduct Authority, have raised concerns about the possibility of sanctioned individuals using digital assets to circumvent punitive economic measures.

Read more: EU watchdog labels crypto a financial stability risk as it mulls new rules