Yesterday, the EU Commission announced that it was putting forward proposals for stricter regulations on cryptocurrencies to combat money laundering and terrorist financing. The plans are set to affect how both transactions, and the anonymous storage of cryptocurrencies is dealt with. On the day of the announcement, popular cryptocurrencies, such as Bitcoin and Ethereum, took a brief pricing hit.
The proposal for the new legislation involves a bid to give governments across the EU greater ordinance over cryptocurrency, meaning transactions involving currencies such as Bitcoin, Ethereum, and Ripple will soon be fully traceable.
The announcement (via. Golem.de) notes, “These proposals are part of the Commission’s efforts to protect EU citizens and the financial system from money laundering and terrorist financing. They aim to facilitate the detection of suspicious transactions and activities and to close the loopholes that criminals use to launder the proceeds of crime through the financial system or to finance terrorist activities.”
The plans also point to cash limitations of €10,000 ($11,777), and the prohibition of anonymous cryptocurrency wallets.
“Limiting high cash payments makes it difficult for criminals to launder dirty money. In addition, the provision of anonymous crypto ‘wallets’ is prohibited, as is already the case today with anonymous bank accounts.”
There’s no word on what this means for anyone currently harbouring an anonymous cryptocurrency wallet but, once all is agreed upon, future wallet setups will involve giving up your personal data to the government.
Coindesk price charts show that in the wake of the announcement, between midnight and 5am on July 20, Bitcoin pricing plummeted by around $1,000 (£733), with Ethereum falling by $94 (£69). Through the day, prices wavered at around $29,600 and $1,700 respectively, though both appear to have now recovered.
Of course, we can’t be sure whether the pricing was directly impacted by the proposals—correlation doesn’t imply causation, and all that—but the effect on the cryptocurrency market is sure to be noticeable when the changes finally roll around.
Lord only knows how much cryptocurrency is being held by dodgy so-and-sos.