Coinbase, EU’s crypto-community in a rage thanks to ‘dangerous provision’
You roll out of bed on a Monday and find a sizeable chunk of crypto-Twitter outraging about an upcoming EU Parliament vote. Furthermore, Coinbase has added its voice to the debate and wants you to chime in as well. What’s going on and what does this mean for the crypto-industry? Here’s the explainer you need.
Coinbase issued a statement calling on readers to make their voices heard before the EU’s vote on applying the travel rule to all crypto-transactions. Coinbase’s release stated,
“Another dangerous provision would require exchanges to inform “competent authorities” of every single transfer from a non-customer’s self-hosted wallet equal to or greater than 1,000 EUR — regardless of any suspicion of bad activity.”
There are also concerns that this interpretation of the travel rule – which makes it mandatory to collect data on crypto transactions – would affect self-hosted wallets, affect innovation, and lead to the surveillance of exchanges.
A proposal submitted to the European Parliament in February 2022 stirred up controversy when it suggested the removal of the 1,000 Euros limit. It also claimed,
“Criminals are able to carry out illicit transfers and avoid detection by structuring a large transaction into smaller amounts using multiple seemingly unrelated wallet addresses, including one time use wallet addresses.”
While the exact voting day is not yet official, a win for the amendment could mean that financial institutions participating in crypto-transactions would have to record, maintain, and submit information to the authorities for all crypto transactions.
But, how valid are authorities’ fears? Chainalysis’ report on crypto-crime revealed that “Cryptocurrency-based crimes” hit an all-time high in 2021, with illicit
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