EU Proposes Law To KYC All Wallet Transfers

[Martin Everson]

putting some funds there and diversifying for a little bit wouldn't hurt, would it?

Yes a little speculation is not end of the world. But don't go betting the house. Personally I know people that are all in on crypto. Laser beam eyes, foot, cock and everything. You cannot reason with such people to be careful in their speculative behavior. But each to their own. I just let people learn the hardway.

 

[backpacker]

You are free to think whatever way you like..lol. But what matters is what the SEC thinks. I think SEC will disagree with your broad statement on crypto . Extract is below but read the full article.

The SEC talks about "... stock token, a stable value token backed by securities, or any other virtual product that provides synthetic exposure to underlying securities, ..." which has nothing to do with a broad statement on crypto.
And my statement had nothing to do with a broad statement on crypto either. It was a simple response to you wondering "... if they will introduce circuit breakers in crypto trading like they have on stock exchanges. If they take out the wild volatility from crypto trading then most speculators will leave the crypto space I think. ...".

When somebody talks about volatility in the crypto space he is not supposed to mean stablecoins or something else backed by fiat or with exposure to other underlying financial assets.
Why (?): Because by nature volatility in the aforementioned is low or non-existent!
If the SEC finally assumes these "pseudo-cryptos" to be under their regulatory regime, I will applaud them - it is about time to provide clear rules.
However, nobody at the SEC wants to put BTC, ETH or the likes under their regulatory regime. They already have a persistent Waterloo with XPR which is about enough for their stomach and quite borderline.

So, do like the SEC does: Distinguish between real crypto (i.e. non-inflationary self-reliant fiat alternatives) and "pseudo-crypto" (i.e. stablecoins, asset-backed tokens, tokens with underlying securities ...).

 

[Martin Everson]

Distinguish between real crypto (i.e. non-inflationary self-reliant fiat alternatives)

lol...give me an example of "real crypto" so I understand you?


P.S I know in general crypto folk get upset. I understand they are passionate about it. But love can blind you to reality...lol. Sometimes folk need to take a step back and assess the situation of what they are speculating on.

 

[Sols]

Nope. simple because both regular and OTC p2p crypto is still a thing, parties in a p2p trade can be a financial service provider, a money exchanging desk, regular companies or individuals.

If we assume a future where privacy coins are effectively forbidden (due to the massive money laundering risks), any such exchange is going to come with tremendous risk. Just like how you can trade illegal goods for cash and bitcoin today, you could trade illegal crypto for cash and other crypto. You can exchange all you want but as soon as you engage in something that's part of the regulated financial system, which in the future will include crypto (remains to be seen how and to what degree), things get difficult and may require unlawful solutions. It might be considered money laundering to handle funds originating from privacy coins. There will always be a black market, of course.

If that is the regulatory path we are headed down, privacy coins are going to be even further relegated to mainly criminal activities and a handful of people who support it on ideological grounds. The vast majority of society would never touch them.

In this hypothetical regulatory future (which I'd argue is in line with the current trends of financial regulations globally), exchanges and financial institutions that engage in crypto would stop supporting XMR. Banks and other financial institutions would have a regulatory onus to ensure that they do not hold money that originates from trade in privacy coins. When your bank asks for KYC and SOW/SOF, they'll dig and dig and if they come across privacy coins, there goes your bank account.

There is nothing "simple" about something being shunned by the financial system due to regulatory pressure. If you don't believe me, try to buy a gun from a North Korean webshop with a credit card. Or try to sell Iranian oil in XMR to someone in South Sudan and explain that to your bank when you go to cash out.

 

[LegitBananas]

Right so your real use case for XMR is criminal activity. Got you....lol.

Criminals were also the pioneers for BTC and then BTC reached a trillion dollar marketcap and has the worlds richest people talking about it... Funny how that works

 

[Martin Everson]

Criminals were also the pioneers for BTC and then BTC reached a trillion dollar marketcap and has the worlds richest people talking about it... Funny how that works

If you have any other use cases for XMR other than criminal activity and dark web then do share..lol?

 

[backpacker]

lol...give me an example of "real crypto" so I understand you?


P.S I know in general crypto folk get upset. I understand they are passionate about it. But love can blind you to reality...lol. Sometimes folk need to take a step back and assess the situation of what they are speculating on.

Remove your blinders, read my post again and I am sure you will understand.

This is not about pro- or contra crypto. This is solely about the article you mentioned.
You put out an assumption based on an entire market. Whereas Mr. Gensler clearly defined certain areas of this specific market which he wants to put under SEC regulation.

 

[John Spectre]

There is nothing "simple" about something being shunned by the financial system due to regulatory pressure. If you don't believe me, try to buy a gun from a North Korean webshop with a credit card. Or try to sell Iranian oil in XMR to someone in South Sudan and explain that to your bank when you go to cash out.

Are the any of this operation in 2021 will go with right and direct payment purpose showed in?
Now it's a tons of different ways how to hide real purpose of payment by coverage companies, routes etc. And in case route are worked fine - no sense in crypto at all.
If you evolved crypto, you just create one more problem for your laundering/criminal activity.
If you actually use any anonymous crypto - just a good luck even with crypto exchanges, they will lock you immediately. so you would left literally alone for p2p transactions in big crypto world.

 

[Martin Everson]

Remove your blinders, read my post again and I am sure you will understand.

This is not about pro- or contra crypto. This is solely about the article you mentioned.
You put out an assumption based on an entire market. Whereas Mr. Gensler clearly defined certain areas of this specific market which he wants to put under SEC regulation.

So you can't give me an example of a "real crypto" so I can understand your point ? Fair enough....lol. Back to OP topic .

 

[Sols]

Are the any of this operation in 2021 will go with right and direct payment purpose showed in?

I don't understand the question.

Now it's a tons of different ways how to hide real purpose of payment by coverage companies, routes etc. And in case route are worked fine - no sense in crypto at all.

I'm aware there are ways around it. My point wasn't that it's impossible. My point was that it's not simple.

 

[JackAlabama]

Business as usual, these f*****s don't understand the s**t that they slap laws on, like if you hold a fungible coin that's called X. how can you prove that this 1 x isn't the same as any other X on the blockchain. spoiler: they can't. and that's what happens with monero. It's fungible and private by default and no matter how hard they try they can't do anything to stop it, unless they want to infiltrate the company behind it, which (spoiler#2) doesn't have a company, So how can they shut down something that they can't even reach.

But money laundering, terrorist financing, and the trigger words "children", cry me a river. but surprise, most of these crimes was and still is done via cash and regular financial systems aka banks, and the most popular one is the scandal of HSBC being fined 1.9 billion dollars for money laundering.

https://www.europol.europa.eu/newsr...ng-criminals-prefer-cash-for-money-laundering
https://www.investopedia.com/stock-...ndering-scandal-hbc-scbff-ing-cs-rbs0129.aspx

Nope. simple because both regular and OTC p2p crypto is still a thing, parties in a p2p trade can be a financial service provider, a money exchanging desk, regular companies or individuals.

Also privacy coins has a value, they are "fungible" digital cash, just the same as any cash but digital. 1 monero is 1 monero, because of it's anonymous blockchain and the fungiblity feature of it.
however 1 btc isn't the same as any other btc because of the transparent blockchain, so you end up with "clean btc" and "dirty btc".

people who don't understand crypto think that BTC is the perfect heaven for criminals, when in reality, it's pretty terrible because of it's transparent blockchain and there are tools like chainalysis that makes tracking btc transactions easier than ever.

Look at localbitcoin or localcrypto or any other p2p service. you find a local, You send crypto to him and he sends you fiat from his local bank account to your local bank account, can be the same bank or a bank from the same country. Now, how can government stop that?. they can't, unless governments want banks to ban transfers to other accounts lol.

if you just want to avoid the west all together, look no further than Asia. p2p is the norm there and it's done in larger amounts without any annoying what's and ifs.

In Africa as well which is the "new" Asia. You need the basic things there like BTC which solves enough issues.

The task dividing between "clean" and "dirty" BTC is not a trivial task as you cannot stop any "clean" address from receiving tainted funds from a "blacklisted" address. There are also many initiatives making BTC fungible which on lightning is anyway a non event.

 

[Sols]

The task dividing between "clean" and "dirty" BTC is not a trivial task as you cannot stop any "clean" address from receiving tainted funds from a "blacklisted" address. There are also many initiatives making BTC fungible which on lightning is anyway a non event.

The task would fall on the customer, not the financial institution. You'll have to prove that your BTC is clean. If you can't, your bank won't be comfortable taking it on.

That's how it is now with fiat. If you wire in money to your bank, it's not up to them to prove the money is clean. It's up to you, which you do by providing supporting documents.

 

[JackAlabama]

If we assume a future where privacy coins are effectively forbidden (due to the massive money laundering risks), any such exchange is going to come with tremendous risk. Just like how you can trade illegal goods for cash and bitcoin today, you could trade illegal crypto for cash and other crypto. You can exchange all you want but as soon as you engage in something that's part of the regulated financial system, which in the future will include crypto (remains to be seen how and to what degree), things get difficult and may require unlawful solutions. It might be considered money laundering to handle funds originating from privacy coins. There will always be a black market, of course.

If that is the regulatory path we are headed down, privacy coins are going to be even further relegated to mainly criminal activities and a handful of people who support it on ideological grounds. The vast majority of society would never touch them.

In this hypothetical regulatory future (which I'd argue is in line with the current trends of financial regulations globally), exchanges and financial institutions that engage in crypto would stop supporting XMR. Banks and other financial institutions would have a regulatory onus to ensure that they do not hold money that originates from trade in privacy coins. When your bank asks for KYC and SOW/SOF, they'll dig and dig and if they come across privacy coins, there goes your bank account.

There is nothing "simple" about something being shunned by the financial system due to regulatory pressure. If you don't believe me, try to buy a gun from a North Korean webshop with a credit card. Or try to sell Iranian oil in XMR to someone in South Sudan and explain that to your bank when you go to cash out.

If it is going down further that path, everything except getting gov assistance food (bug meals) and gov handouts will be called money laundering or unlicensed business activities.
If you study communist places or those who newly introduced market reforms, the only thing which works in these are black markets and its goods command an insane high price.
So from that point of view, an investment / speculation into privacy coins could be very profitable (except the known problems of xmr, low hashrate, no audit possible to detect inflation bugs allowing one to print as much as you would like in case of errors etc.)
Why would you really need a financial institution when you can save/lend/borrow/send internationally even without them?

https://www.fxstreet.com/cryptocurr...s-access-to-cryptocurrency-funds-202107221621
That is why there will be no ban but milking attempts by the more sophisticated govs.

 

[JackAlabama]

The task would fall on the customer, not the financial institution. You'll have to prove that your BTC is clean. If you can't, your bank won't be comfortable taking it on.

That's how it is now with fiat. If you wire in money to your bank, it's not up to them to prove the money is clean. It's up to you, which you do by providing supporting documents.

Yep, spot on. Soon you have to prove you are not a criminal. That is what is happening in public health right now. You have to prove you are healthy, lessons from aml/kyc learned and applied in 2020.
A marker of really dark ages and really worrisome times: In dubio pro reo - Wikipedia

The key here is actually to not need the financial institution in the first place as people in ex-communist countries show you how its done.

 

[EuroKiss]

Too eu-centric vision. I see growing adoption in Latam, Asia and Africa, even in the same US lots of people still love cash and youngsters love crypto. What happens in EUSSR not necessarily means something for the rest of the world, Eu is becoming more and more irrelevant and with the green deal western economy will disappear in a renewed Morgenthau plan.

 

[avalanche]

1. In case of crypto having it's only purpose as a tool of anonymity then, unfortunately, Yes.
2. In case of crypto being the alternative of choice to fiat and its digital variants, then the answer is No.

Every legitimate and clean holder of a major cryptocurrency should be glad about this sort of regulation since it will solve problems to turn fiat into crypto and vice versa.
This forum is an excellent place to study the various difficulties people face regarding crypto: Be it purchasing/holding/transacting/cashing out - nothing goes smooth! With a clear cut regulation these problems will all be gone.

It will also not take long anymore and all the "I Hold Physical"-goldbugs will face major problems to exchange their secretly stored "safe-haven asset" into anything useful.

"Legitimate and clean". What about the fact that regulator's databases can leak all the time exposing literally your wallet address, your real address and how much you have?

 

[backpacker]

@Martin Everson :

You can't generalize the word crypto.

So you can't give me an example of a "real crypto" so I can understand your point ?

real crypto (i.e. non-inflationary self-reliant fiat alternatives)

https://watchcrypto.media/what-is-a-non-inflationary-cryptocurrency/https://bitcoinist.com/bitcoin-is-not-inflationary/- Case Closed-

 

[backpacker]

"Legitimate and clean". What about the fact that regulator's databases can leak all the time exposing literally your wallet address, your real address and how much you have?

We had the same argumentation during the implantation of CRS. It is not relevant to the regulator!
In today's world there is no more privacy and everybody has to get used to it (and arrange accordingly).

 

[MiddleEuroAsia]

Ok you said a lot, so let's breakdown what you said bit by bit:

If we assume a future where privacy coins are effectively forbidden (due to the massive money laundering risks), any such exchange is going to come with tremendous risk. Just like how you can trade illegal goods for cash and bitcoin today, you could trade illegal crypto for cash and other crypto. You can exchange all you want but as soon as you engage in something that's part of the regulated financial system, which in the future will include crypto (remains to be seen how and to what degree), things get difficult and may require unlawful solutions. It might be considered money laundering to handle funds originating from privacy coins. There will always be a black market, of course.

the whole privacy coins are a tool for money laundering or are more risky than any other financial instrument is just pure nonsense, sorry. These are not my words, these are the words of perkins Coie, one of the most prestigious lawfirms in the whole world, here is their report about privacy coins.
And in summary, they said and I quote "We conclude that privacy coins protect legitimate individual and commercial privacy interests and that existing financial regulations sufficiently address the AML issues that privacy coins present" and they continue "Not only do privacy coins provide public benefits that substantially outweigh their risks, existing AML regulations properly and sufficiently cover those risks, providing a proven framework for combatting money laundering and related crimes."

So, here you are, you have a prestigious law firm that says that current AML laws cover privacy coins well enough. it's just that there are regulators who are pretty dumb to comprehend that.

If that is the regulatory path we are headed down, privacy coins are going to be even further relegated to mainly criminal activities and a handful of people who support it on ideological grounds. The vast majority of society would never touch them.

if it became illegal in one place, that doesn't mean it will be illegal in the other, just like how we are searching for alternative tax residence, we will find an alternative legal crypto friendly jurisdiction, and this even easier since you can change your location digitally, I like to think of privacy coins as a swiss numbered bank account that you can take anywhere but it's digital.

Also it doesn't matter if society touches them or not, the vast majority of society doesn't give a s**t about taxes, they say they do, but they vote for politicians who increase these taxes, and then they start complaining again and the cycle continues. The only people that care about taxes and do something about it or find alternative means to reduce their tax burden are few and far between.

And I think most people in this forum fall into the latter group, we go and find alternative means to make our life easier, it's not a simple process but yet we still do it. Same with crypto, gold and banking. nothing in our world is really "simple".

In this hypothetical regulatory future (which I'd argue is in line with the current trends of financial regulations globally), exchanges and financial institutions that engage in crypto would stop supporting XMR. Banks and other financial institutions would have a regulatory onus to ensure that they do not hold money that originates from trade in privacy coins. When your bank asks for KYC and SOW/SOF, they'll dig and dig and if they come across privacy coins, there goes your bank account.

I doubt that all of this will happen but let's assume so. this why I'm taking about p2p crypto specifically. go and travel to asia (Singapore, HK, Malaysia, Thailand..etc) and you will find that p2p crypto is the king there. mobile wallets, cash in person, local bank transfers and lots of other payment methods are the way to go. these are done by OTC desks and individuals and in any amount big or small, and there is no interference from financial bodies for such transfers. it's way easier than you might think.

There is nothing "simple" about something being shunned by the financial system due to regulatory pressure. If you don't believe me, try to buy a gun from a North Korean webshop with a credit card. Or try to sell Iranian oil in XMR to someone in South Sudan and explain that to your bank when you go to cash out.

come on, Are you really comparing trading crypto with trading with north korea? lol.

If someone is really engaging in such dangerous trades, then I'm sure he can cover his own a*s, just like how cartels and other criminal organizations cover their own too. And i'm sure they will use the regular banking system just like how it happens right now in the real world.

 

[Sols]

the whole privacy coins are a tool for money laundering or are more risky than any other financial instrument is just pure nonsense, sorry. These are not my words, these are the words of perkins Coie, one of the most prestigious lawfirms in the whole world, here is their report about privacy coins.
And in summary, they said and I quote "We conclude that privacy coins protect legitimate individual and commercial privacy interests and that existing financial regulations sufficiently address the AML issues that privacy coins present" and they continue "Not only do privacy coins provide public benefits that substantially outweigh their risks, existing AML regulations properly and sufficiently cover those risks, providing a proven framework for combatting money laundering and related crimes."

So, here you are, you have a prestigious law firm that says that current AML laws cover privacy coins well enough. it's just that there are regulators who are pretty dumb to comprehend that.

It's the regulators that call the shots. I'm just trying to discuss the likely regulatory outcome in the future.

if it became illegal in one place, that doesn't mean it will be illegal in the other, just like how we are searching for alternative tax residence, we will find an alternative legal crypto friendly jurisdiction, and this even easier since you can change your location digitally.

In many parts of the world, money laundering either wasn't a crime at all until recently, or was a very low priority with weak laws. Then a couple of big economies started to strong-arm everyone into obedience through FATF-GAFI.

Now look at where we are.

come one, Are you really comparing crypto with trading with north korea? lol.

Yes and no. I'm comparing a (likely) hypothetical future for crypto with the current reality of fiat. If thought experiments aren't your cup of tea, that's fine.

If someone is really engaging in such dangerous trades, then I'm sure he can cover his own a*s, just like how cartels and other criminal organizations cover their own too.

You missed my point. Maybe I didn't make it well enough. I meant to illustrate that it isn't simple. I did not mean to imply that it was impossible.