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EU to make Bitcoin traceable, ban anonymous crypto wallets
- 0xdeadb00f 5y agoSorry, but bitcoin has always been "traceable".
- fabioyy 5y agoeverytime bitcoin reaches a High value.. some bad news appears on the internet..
- deleted 5y ago[deleted]
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- amacalac 5y agolol
- seibelj 5y agoIt is very hard to ban math. An “anonymous wallet” is a random number!
- rspeele 5y ago> In practice, this means that a service provider exchanging crypto on behalf of a customer would have to record their name, address, date of birth and account number, as well as the name of the intended recipient of the transfer. As usual, the regulation checkpoint is at the exchanges.
- deleted 5y ago[deleted]
- nyanpasu64 5y agoAnd what happens when you transfer it to a mixer? A self-hosted wallet? Or the EU regulate exchanges to the point you can't transfer your Bitcoin to a wallet you own?
- neverywhere 5y agoMixers will be considered illegal by the EU. It sort of makes sense. Mixers are primarily used to hide one's identity when doing shady/illegal things with cryptocurrency.
- colinmhayes 5y agoWhat about deFi swappers?
- meepmorp 5y agoNo, they're cool with that specific kind of money laundering.
- pavlov 5y ago> “Or the EU regulate exchanges to the point you can't transfer your Bitcoin to a wallet you own?” Why not? The EU regulates banks to the point that you can’t transfer money to an account in North Korea. It’s not obvious why Bitcoin exchanges should be regulated differently (as you can’t prove the random Bitcoin address isn’t controlled by NK).
- dt2m 5y agoThis is going to work out just as well as when the EU banned tracking cookies!
- croes 5y agoWhen did the EU ban tracking cookies?
- lmkg 5y agoThe EU regulates tracking cookies. They're not banned, but the requirements for their use are rather strict, due to the interactions between the ePrivacy Directive (2002) and the GDPR (2016). To GP's broader point, "what about GDPR?" the GDPR basically steps back when other laws apply. Processing personal data requires a legal basis, and one option for legal basis is "Legal Requirement," so if another law says it's required, GDPR says it's OK. And furthermore several provisions (like erasure) don't necessarily apply. GDPR would impose some restrictions like access and notice. The biggest issue is going to be "who is the Controller?", i.e. who 'owns' the data and who is in control of the processing?
- liuliu 5y agoI know this is an unpopular take, but for sites (like Stackoverflow) that give me options (if they don't, some times I just skip), I will select "strict" and continue. This is probably an improvement from previous status-quo for me.
- _Algernon_ 5y agoIf they were competent, they would have worked with web browser developers, and made it browser side like other permission dialogs. Imagine what could have been: a standardised prompt that is always the same, persists when clearing cookies, etc. Instead we have full screen modal popups that render 5 seconds after page load and move around while loading.
- ranguna 5y ago
- penultimatebro 5y agoThank you EU - Bitcoin transactions weren’t traceable at ALL before.
- qnsi 5y agoI understand anti-EU sentiment, but who uses bitcoin for something different than transfering illegal funds and speculation? I understand Ethereum and other smart contract cryptocurcies, but time when people believed Bitcoin is going to become currency are long gone
- ls15 5y ago> who uses bitcoin for something different than transfering illegal funds and speculation? A couple of months ago, a combination of Covid-related travel restrictions and new EU KYC regulation lead me into a situation where the only way to renew my VPN in a timely manner was through crypto. I was really lucky to have some.
- frankbreetz 5y agoEl Salvador is trying to use it a currency. Well, I still wouldn't consider it a currency since pretty much everything will be priced in dollars, but they are using to transfer value. One of the man reasons for this was to send home remittances. Many people still believe Bitcoin could at least be used to transfer value, like a currency. AMC, Starbucks, and United Wholesale Mortgage are all looking into accepting it. Whether these come to be seems to be seen, but there is obviously a lot of people that still expect Bitcoin to be a currency, or at the very least a way to transfer value.
- deleted 5y ago[deleted]
- jacobr1 5y agoMy understanding is that they are trying to use the Lightning Network. Though my brief googling of this only shows speculation that this is the case, rather than confirmation.
- pcthrowaway 5y agoLightning Network is an abomination. The company behind it, Blockstream, actively suppressed the movement to increase the block size, which led to the bitcoin cash fork.
- rad_gruchalski 5y agoEverybody who ever thought that crypto currencies will not come under this scrutiny was highly delusional. All other governments will follow soon.
- ProjectArcturis 5y agoYup. A technology which is mainly used for money laundering, dark-net markets, ransoms, and speculation will certainly attract the attention of government.
- ashwagary 5y agoSavings/store of value is a bigger use case than anything you mentioned. Not sure why critics have to be so disingenuous if they have a strong enough bear case.
- herbst 5y agoWhy do people think that? Where do you get your data from?
- darig 5y agoA technology which is entirely based on mathematics can withstand more than a little attention.
- oceanplexian 5y agoGovernments can either get onboard, and come up with a reasonable, practical regulatory environment, or alternatively they will be left behind and Crypto will evolve to circumvent their wishes. It is a shame but the USA may end up leapfrogging the EU in the same way they have done with other innovations, like Social Media, Self Driving Cars, and other cutting edge tech. It turns out regulating entire sectors of the economy out of existence has consequences.
- user-the-name 5y agoGovernments have no interest in being "ahead" in enabling fraud, crime and tax evasion.
- gjsman-1000 5y agoOld news... also the people announcing it are actually idiots or misinformed on terminology because they aren't talking about local wallets on your computer. By "anonymous crypto wallets" they are talking about anonymous wallets on exchanges, which is very different than most people would think at first glance. This is not "send in the public key of every wallet you've ever touched to the tax service."
- laurent92 5y agoNext step: Forbid exchanges from exchanging with non-compliant wallets.
- vinni2 5y agoPrevious discussion here https://news.ycombinator.com/item?id=27897314 https://news.ycombinator.com/item?id=27897314
- nathias 5y agoThis is good for Bitcoin. (really, we need more traffic to go to fully decentralized exchanges)
- randomopining 5y agoCan the DEX's work even if they are outlawed in the future?
- codehalo 5y agoCan TCP/IP still work if it's outlawed?
- dmantis 5y agoLike torrents or dark markets. Technically not a problem, but will cause more effort and risks for creators (goodbye VC backed "Decentralized" swaps) and higher costs for clients who will pay for covering those risks. I assure you, though, that some sneaky guy from Africa, Russia, Ukraine or China would always find his way to help people changing their money. Btw, in theory there is a way to create completely decentralized versions (hosting frontend on IPFS/torrents/other distributed storage) and the whole backend made on smart-contract, but it would be slower and harder to use than current systems with partially centralized backends and CDN js/static distribution.
- anm89 5y agoThe EU isn't doing anything to bitcoin. They have no ability to regulate bitcoin. They can make it traceable when it is held on kycd exchanges In their jurisdiction. That is a big difference
- bdcravens 5y agoAny government can't regulate Bitcoin per se, but they can always regulate the intersection of their currency and Bitcoin. If they require banks to observe a whitelist of acceptable exchanges when honoring transfer requests, the banks will happily comply.
- Daishiman 5y agoThey have the same ability to regulate it as they do cash transactions. Which is to say, people will still find workarounds if they really want to take a shot at it, but forget about transacting with legit companies and institutions unless you want the spotlight shone on you.
- ashwagary 5y agoAdding 1 additional p2p hop to transactions is trivially easy with Bitcoin and readily automatable. With 1 additional hop, you facilitate somebody's purchase of bitcoin and they pay for the services you need in fiat (usually at a discount). Good luck regulating that.
- Daishiman 5y agoOh you sweet summer child, tax agencies and financial investigators know the ins and outs about financial triangulations since the dawn of tax fraud. You think they're not going to ask you about it once you're on the spotlight for an audit?
- ashwagary 5y agoHow would anyone know that you are in fact transacting BTC at all (especially if it's anonymized)? The risk seems almost nonexistent unless you are buying really expensive services on a regular basis.
- drummer 5y agoMonero and Pirate Chain will reach the moon in 2 years.
- nenadg 5y agoPure wapor. How will they ban anonymous wallets?
- viro 5y agoby making it a crime to have one or accept money from one? ¯\_(ツ)_/¯....
- herbst 5y agoThis will thrive business to Switzerland and other crypto save heavens. Nice one EU
- nenadg 5y agoGood luck making it a crime to install program.
- afiori 5y agoIt is quite easy to criminalize distribution and possession of digital assets. Also no one care if you bounce bitcoins between your own wallets, any governments just needs to regulate at the border: retail shops that accept crypto and exchanges of crypto/fiat are very easy to identify and regulate.
- xtracto 5y ago> Good luck making it a crime to install program. It is already a crime to passively posses certain combinations of bits (i.e. that directly or indirectly [zip, truecrypt] represent a child porn image). It has been made illegal to possess the implementation of a mathematical function (i.e. Kerberos being a "Auxiliary Military Equipment"). It will be pretty trivial for the government to make it ilegal to download, posses or install a program (e.g that interacts in some way with the Bitcoin network).
- lottin 5y agoBy passing a law that makes them illegal, simple as that.
- zigradett 5y agoThis was news back on July 20th. What has changed?
- gfodor 5y agoIn other news, the government has declared by decree that nobody is allowed to memorize seed phrases anymore. Also, multiplying prime numbers is now illegal. edit: Downvotes are funny because we are almost certainly going to see laws passed in the next few years that are functionally equivalent to the rules stated above.
- volta83 5y agoThe downvotes you are getting is for not reading the article. Your comment is not on-topic.
- gfodor 5y agoI read the article. Why is what I wrote not on-topic? I tend to think the government will find its attempts to rein in crypto will just feed into the anti-fragility of the whole thing, and the result will be increasingly nonsensical attempts to stomp it out up until capitulation. And yes, this leads to a prediction that some very technologically illiterate legislators will probably draft rules that are semantically equivalent to what I wrote.
- ajkdhcb2 5y agoThe title is simply incorrect and clickbait, so it should be changed. I think that is a quite relevant point
- thirtyseven 5y agoIn other news, the government has declared by decree that you can't move objects outside of an arbitrarily defined border that a piece of paper says is someone's "house", and then exchange those objects for different pieces of paper that the very same government has declared has value.
- gfodor 5y agoabstracting these things to sound silly doesn't move you outside the realm of well established norms regarding the government's role in mediating property rights through force. what I wrote above is in a totally different ballpark - and we should expect to see government laws that pop up that do in fact attempt to regulate digit memorization or multiplication.
- Animats 5y agoThe crypto world is running out of safe havens. China cracked down, and cut the power to large Bitcoin farms. In the US, the SEC and CFTC have been tightening up on crypto-related things that look like securities and things that look like exchanges. Israel kicked out the binary option crowd, which overlapped with the crypto crowd; they seem to have moved to Bulgaria. Now the EU. The bigger countries are in general tightening up on tax havens; incorporating in the Cayman Islands or Vanatu raises more red flags now. The Economist has an article this week, "What if Bitcoin went to zero?"[1] Cryptocurrencies haven't hit a recession yet, and we're getting close to one. Look at house prices. In a recession, things which depend on a net inflow of money collapse. I don't expect Bitcoin to go to zero, but Tether could, easily. When stablecoins crash, they crash all the way. [1] https://www.economist.com/finance-and-economics/2021/08/02/what-if-bitcoin-went-to-zero https://www.economist.com/finance-and-economics/2021/08/02/w...
- peter303 5y agoBut the aggregate value of crypto is comparable to the US currency in circulation: two trillion. https://futurism.com/the-byte/cryptocurrency-worth-more-than-us-currency-circulation https://futurism.com/the-byte/cryptocurrency-worth-more-than... Crypto has a muchlower velocity of trading than currency.
- user-the-name 5y agoCrypto "market cap" is a complete fiction. Only the tiniest fraction of that value actually exists in any form. As you say, crypto has a much lower velocity of trading than currency. That is the hint.
- sennight 5y ago> Cryptocurrencies haven't hit a recession yet, and we're getting close to one. We've been in a recession since Feb 2020...
- CarelessExpert 5y ago> The crypto world is running out of safe havens. So just to be clear, your definition of "safe haven" is, what, total lawlessness with no governmental oversight? Frankly, these moves make me think people are taking crypto seriously now, as we're finally treating it like real money or the banking sector and regulating it accordingly. If anything, it seems to me that should be a sign of success, not failure. (and I should point out I own no crypto and I think blockchains are the biggest technical snake oil grift I've seen in the history of computing)
- seaourfreed 5y agoHow are they going to require this in open source crypto wallet applications that download to your computer. They can be made outside of the EU. Downloaded by EU citizens.
- deleted 5y ago[deleted]
- dusted 5y agoSounds like this will only cause people to trade more in crypto. It's not like bitcoin needs to be able to be traded to fiat to be useful as an item for transferring value.
- bdcravens 5y agoMaybe that's the point. By accelerating the use of it as a currency, it may become more widely used by larger commercial interests that the government can lean on.
- ajay-b 5y agoDoes this not defeat the whole purpose of cryptocurrency? The fact that a government can control its transparency, anonymity, the “currency” is now just a digital object, like any other in a bartering system. I don’t like that a government can trace and identify payment. Perhaps that is nihilistic but it speaks for me to the heart of freedom.
- lamp987 5y agoIf you dont want it to be transparent, you use Monero. Its now even getting atomic swaps with Bitcoin.
- russdpale 5y agoThe entire point is accountability, that seems to be what many people have forgotten. Also, you still have to use the state to enforce property disputes, so cryptocurrency will never buck the traditional system, it simply cant.
- bserge 5y agoYeah, perhaps instead of working around it, people should work to change the existing systems. Otherwise you're always going to be stuck completely underground and treated like a criminal/third rate citizen.
- bdcravens 5y agoWas the ability to move money easily between the government-owned systems and cryptocurrency ever a purpose, or did it just evolve organically?
- vjust 5y agoReaffirming the fact that Cash is king, as far as traceability is concerned. Unless of course, the FBI is tracking the bill numbers. But for all nefarious activities good old fashioned cash rules. No transaction or 'gas' fees either. If you can handle the physical bulk/inconvenience. Bitcoin transactions take minutes or even hours to settle sometime, so 'digital speed' is vaporware at this point.
- randomopining 5y agoYeah but cash you have to physically transfer and exchange, which places you at a place at a point in time. Which is the ultimate "trace".
- cryptica 5y agoEU regulations are all over the place. There is no cohesive moral thread behind any of them. Firstly, they introduced GDPR regulations to prevent companies and organizations from collecting data on citizens... But now they introduce regulations to force companies and organizations to collect data on citizens. It's ridiculous. It's frightening that the government could possibly win a case in a court of law with such fundamentally flawed logic. What would the verdict be like? "Collecting data on people is illegal, but it's also illegal to not collect data, therefore you are guilty!" That must be how totalitarianism comes about; make sure everyone is guilty of something, then you can arrest all your political opponents on any pretext you like. What is the point of the law if it contradicts itself? We may as well go back to living in caves.
- avnigo 5y agoI've experienced HN to be highly anti-Bitcoin for some reason -- got instantly downvoted for commenting neutrally on it [0]. However, I sort of expected more people on here would sympathize with the Cypherpunk Manifesto [1] and band together against pressures to minimize our privacy. [0]: https://news.ycombinator.com/item?id=28114156 https://news.ycombinator.com/item?id=28114156 [1]: https://www.activism.net/cypherpunk/manifesto.html https://www.activism.net/cypherpunk/manifesto.html
- acdha 5y agoHN tends to have a lot of people who are good at technical analysis and allergic to hyperbolic marketing. By now there's been a decade of Bitcoin proponents endlessly repeating claims which are either untrue or highly aspirational while it continues to very expensively not deliver results. This brings me to the second part: anyone who does care about privacy is _especially_ not going to recommend use of Bitcoin since a system which requires you to make an irrepudiable public record of your transactions is actually worse than the status quo. Similarly, people will confabulate about it allegedly being “uncensorable” when it's both easy to censor and, being public, extremely risky for anyone concerned about censorship to use.
- radu_floricica 5y agoI'm not sure how you can call it worse than the status quo. Last week my bank informed me that I passed my ATM limit for the year and it's going to give me a small daily allowance for the rest of the year. And then lied me on the phone that it's a requirement from the central bank. This is neither a joke nor a metaphor - this literally happened to me this month (ING in Romania -they're widely considered the best bank here). Ah, they're an ATM-only bank, they have no tellers, so I can simply not take my money out, unless I make an account with another bank and have it transferred. And this just means I'm going to hit another set of limits. There is a concerted effort to control the financial movements of the population. If you fit within common patterns you don't see it. I'm probably barely at the edge - I've moved on the order of tens of thousands - and I'm hitting it pretty hard. Revolut had my account completely blocked for a couple of months earlier this year, while completely ignoring my calls. Couldn't even close it, since it was not on zero and couldn't take money out of it. And this was for moving around on the order of thousands over a few months, mostly sending money to a few friends. This is not money laundering, this is simply using the money I make very legitimately and paying taxes for.
- hamburgerwah 5y agoeurope will also ban the practicing of arithmetic and mathematics
- SkyMarshal 5y agoBy “ban anonymous crypto wallets”, this article is referring to commercial custodians that offer wallet services to customers. But it doesn’t say anything about whether the ban will apply to FOSS crypto wallets people can download and run on their personal computers. As long as the latter remains protected by free speech laws, similar to cryptography code, and commercial custodial wallets are affected, then this is a reasonable compromise not a huge problem imho.