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EU Plans To Create Database of Bitcoin Users With Identities and Wallet Addresses (softpedia.com)

Posted by BeauHD on from the known-transactions dept.

An anonymous reader writes from a report via Softpedia: "The European Commission is proposing the creation of a database that will hold information on users of virtual currencies," reports Softpedia. "The database will record data on the user's real world identity, along with all associated wallet addresses." The database will be made available to financial investigation agencies in order to track down users behind suspicious operations. The creation of this database is part of a regulatory push that the EU got rolling after the Paris November 2015 terror attacks, and which it officially put forward in February 2016, and later approved at the start of July 2016. Legally, this is an attempt to reform the Anti-Money Laundering Directive (AMLD). The current draft is available here. The current AMLD draft reads: "The report shall be accompanied, if necessary, by appropriate proposals, including, where appropriate, with respect to virtual currencies, empowerments to set-up and maintain a central database registering users' identities and wallet addresses accessible to FIUs, as well as self-declaration forms for the use of virtual currency users."

17 of 130 comments (clear)

  1. Really? by Anon-Admin · · Score: 5, Insightful

    The suggested process for using bitcoin is to create a new wallet address for each transaction.

    They will never be able to keep up with it.

    I guess this is what happens when a bunch of people who dont understand the technology try to regulate it.

    1. Re:Really? by Entrope · · Score: 5, Interesting

      You overlooked the "self-declaration" forms for people using virtual currencies. That translates to making it illegal to use Bitcoin (etc.) without telling the government about your wallet(s) -- probably upon pain of hefty fines. You might not get caught if you only keep funds in Bitcoin form, but if you ever try to redeem it for goods or services in Europe, be prepared to fess up.

    2. Re:Really? by Dunbal · · Score: 2

      What exactly is stopping you from sitting on a pile of bitcoins, and creating a new, declared wallet specifically for any particular "withdrawal"... This is about as stupid as politicians get, but then again...

      --
      Seven puppies were harmed during the making of this post.
    3. Re:Really? by Anonymous Coward · · Score: 3, Insightful

      because it leaves a trail. once they have one point they can then connect you to everything that flows in or out or any other wallet you have transactions with. It is the inherent problem with bitcoin, it is all well and good till you actually need to use it for something in the real world.

    4. Re:Really? by Dunbal · · Score: 2, Interesting

      But you're assuming - or THEY are assuming - that every place that bitcoin came from is from a wallet in a country subject to their silly law. What can they do if the trail is from a wallet that was created in Panama, for example? Prove that Panama to me is an illegitimate transaction AND that I actually own the wallet in Panama. Trivial to set up with VPN's and/or friends/relatives who are actually outside your country. Again, politicians fail to realize that their laws are limited by geography whereas the internet knows no borders.

      --
      Seven puppies were harmed during the making of this post.
    5. Re:Really? by bloodhawk · · Score: 2

      from panama, well you just did an international transaction and are therefore subject to money laundering laws around international transfers which require declaration of the parties involved in the transfer and the reason for the transfer..

    6. Re:Really? by bloodhawk · · Score: 2

      It isn't up to them to prove, it is up to you to prove it was legitimate! money laundering laws were created to prevent the scenarios you describe by putting requirements on you and any exchanges and 3rd parties involved to correctly record the transactions and identities and report them where appropriate.

    7. Re:Really? by Opportunist · · Score: 3, Insightful

      Shhh... Governments are like parents. As a kid, you keep your parents thinking that you believe in Santa so they continue to give you gifts at Christmas. With governments, you keep them thinking that their laws work so they keep out of your hair.

      --
      We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
    8. Re: Really? by Entrope · · Score: 2

      Why do you think the law won't require you to declare each wallet when you first create, fund, or acquire it?

    9. Re:Really? by AmiMoJo · · Score: 5, Informative

      Nope.

      From the proposal:

      In respect of designing providers of exchange services between virtual currencies and fiat currencies as obliged entities, the proposed amendments respect the proportionality principle. In order to allow competent authorities to monitor suspicious transactions with virtual currencies, while preserving the innovative advances offered by such currencies, it is appropriate to define as obliged entities under the 4AMLD all gatekeepers that control access to virtual currencies, in particular exchange platforms and wallet providers.

      In other words, it will be perfectly legal to use Bitcoin as you please and they don't propose making people register their private wallets etc, just the same as they would never propose people register their physical wallets. They are only interested in having exchanges and wallet providers (virtual banks) collect this information, just like exchanges and banks for fiat currency have to.

      The idea is to make money laundering harder. It's a sensible, practical proposal that is merely the existing laws applying to fiat currencies being applied to virtual ones. It would be stupid if they didn't.

      I know it's unfashionable to read the article, but this is what gives the EU a bad name and leads to stupidity like Brexit. It look me about 30 seconds to see what this was really about. Doesn't help that TFA and the summary are both stupid I suppose.

      --
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    10. Re:Really? by bluefoxlucid · · Score: 2

      "Making money laundering harder" isn't really sensible. All implementations are hubris and rather inconvenient for model-citizens.

      In the United States, carrying a certain sum of cash is indication of criminal activity. This is done to combat money laundering and drug trade. They might not be able to charge you with a crime, but they can seize your cash; it's called asset forfeiture. In Alabama, if the police pull you over for a broken tail light, they can demand you display your wallet contents (notably by way of demanding to see your license), and seize any cash if you have more than $100. United States border control looks for "large sums", which might be $2,000 or $5,000, notably if you don't declare that you have a "large sum"; the official definition is $10,000, but smaller sums become large sums by way of fuzzy laws (i.e. if you pull $9,995 from a bank, the bank has to report that you seem to be skirting the mandatory reporting law for transactions over $10,000, even though you didn't actually pull a legally-defined "large sum", because you seem to have specifically avoided pulling a large sum).

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  2. Re:One unsaid goal is to ease confiscation by Dunbal · · Score: 2

    You bet. Because every year we have more and more restrictive bank regulations (to the point where it's now difficult to move your own damned money around from account to account or asset to asset), yet there are more drugs, more laundering and there is more terrorism. Makes you think those laws were never intended to go after criminals in the first place.

    --
    Seven puppies were harmed during the making of this post.
  3. Re:LOL Politicians by Anonymous Coward · · Score: 2, Insightful

    And they're going to enforce the "opt in" part of this deal how,

      "Jail" the way governments control things.

  4. Re:One unsaid goal is to ease confiscation by bloodhawk · · Score: 2

    The entire value of bitcoin is only a few billion dollars, this wouldn't even put a dent in a weeks interests payments of many countries.

  5. no evidence by ooloorie · · Score: 2

    There is no evidence that Bitcoin was used by terrorists. This is the usual statist bullshit coming from European governments.

  6. Re: One unsaid goal is to ease confiscation by prefec2 · · Score: 2

    How can you run out of money as a state? Usually you 'print' new money. That is BTW the modus operandi of the FED and the ECB today.

  7. Penny wise and pound foolish again by 0dugo0 · · Score: 2

    €168 billion in VAT fraud a year because they can't exchange tax data if their life depended on it, and now they want to run a shadow bank to track my digital collectors items?