The New EU Crypto Anonymity Busting Law

How EU's proposed New Privacy Busting Law will Apply to Bitcoin ATMs

The New EU Crypto Anonymity Busting Law

The EU parliament approved the proposed measure to clamp down anonymous crypto transactions on Thursday, 31st March as over 90 lawmakers voted in favor of the proposal - according to CoinDesk. The new law eliminates the initial EUR 1,000 AML (transaction) limit for exchanges. By implication, investors and crypto users will have to comply and adopt full KYC rules for even the smallest crypto transactions across exchanges, wallets, and virtual asset service providers, including Bitcoin ATMs. 

However, the measure is still not passed as law as the current news only provided details of EU parliament approval to enforce full AML/KYC compliance to all crypto transactions. The recent measure would become law if the EU Council and the parliament approved the proposal. The EU parliament's crypto privacy busting approval is met with much debate. For instance, the European People's Party (EPP) says the law effectively bans self-hosted wallets. According to EPP spokesperson Markus Ferber to CoinDesk, "With this approach of regulating new technologies, the European Union will fall further behind other, more open-minded jurisdictions," 

Also, Coinbase, one of the leading crypto firms, has expressed dissatisfaction as it would have to consult with the authorities whenever a customer receives cryptocurrency over EUR 1,000 from a self-hosted wallet. Legal experts warned that the proposed crypto privacy busting laws are stringent as they could lead to legal challenges in EU courts. 

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Bitcoin ATMs operation under the new Laws

As stated initially, the proposal hasn't reached the EU Council; however, if it passes as a full-blown crypto privacy law, crypto anonymity will remain history. As the law is stretched to all EU-based virtual assets service providers, Bitcoin ATMs operating under the EU jurisdiction will have to comply with the new crypto privacy law. 

To be safe under the EU laws, it is recommended that traders and crypto investors should trade with caution, even when buying and selling Bitcoin on Bitcoin ATMs. One of the due diligence is to check if the Bitcoin ATM is registered according to local laws and check what the law says about buying and selling Bitcoin anonymously in that jurisdiction.  

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Why the new law is beyond crypto anonymity

While the new EU law implements AML compliance, directing all service providers to ensure its users pass a full KYC for every transaction, it impedes innovations. Although it's not entirely clear what additional measures could be implied, Hansen warned, this new development could mean anything down to the outright ban on non-custodial wallets as members of the center-right European People's Party (EPP) opposed many of the more controversial changes, calling it a "de facto ban of self-hosted wallets."

Beyond the ban, this approach of regulating new technologies, experts warn the European Union will fall further behind other, more open-minded jurisdictions.

Before the law goes into effect, it is a good idea to compare privacy of different crypto as they are in 2022.

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