Here we go again.
Just as the market is waking up, there’s some potential fear, uncertainty and doubt (FUD) from Europe.
On Thursday, March 31, 2022, the European Parliament Committee on Economic and Monetary Affairs (ECON) will vote on a proposal “for a regulation of the European Parliament and of the Council on information accompanying transfers of funds and certain crypto-assets”. The 60-page proposal aims at tackling the alleged misuse of crypto, such as money laundering and the funding of terrorist organizations.
The proposal includes an amendment that would require financial institutions to attach specific information to crypto transfers, including details about the transacting parties.
Amendment 15 (Recital 27b) of the proposal concerns “un-hosted” wallets, stating that a “crypto-asset service provider or other obliged entity should obtain and retain the required originator and beneficiary information from their customer, whether originator or beneficiary.
When it comes to the accuracy of the information, the crypto asset service would be obliged to verify the accuracy of the information in respect to their customer, and “is not expected to verify the required information with respect to the originator or beneficiary behind the un-hosted wallet”.
It would also require exchanges to notify authorities of all transactions involving an un-hosted wallet if they exceed €1,000:
Furthermore, if information gathered is found to be inaccurate, incomplete, or is considered suspicious, the service provider should assess whether the transfer should be rejected or suspended, and in turn, reported to the Financial Intelligence Unit (FIU).
Should it pass, the proposal could have a particularly damaging effect on how decentralized finance (DeFi) and decentralized autonomous organization (DAO) are able to function, causing a lot of uncertainty and unclarity in this sector.
Bitcoin could be in for a short-term pull back any time now. The charts are calling for a retest, and perhaps the upcoming vote could be the catalyst to make it happen. Clearly, this is something that we’ll be following closely in the coming days! But remember, the last time the European Parliament was confronted with an anti-proof-of-work (PoW) bill, it was rejected at the voting stage. Balancing innovation with regulation appears to be a priority, so let’s see how this one plays out.
Questions for the community
- Do you think this EU bill is significant enough to trigger a market-wide correction?
- What are your BTC price predictions for this week?