40 crypto companies sign open letter to EU regulators
Industry leaders are concerned that the latest regulations could limit the adoption of Web3 among EU citizens
By Shashank Bhardwaj
Forty crypto companies have reportedly signed an open letter addressed to European Union regulators, including the European Parliament, European Commission, and other key EU institutions, calling for ‘common-sense regulation, standardised compliance procedures, and an innovation-friendly business environment’.
Stakeholders who signed the letter include Pascal Gauthier of Ledger, Diana Biggs of DeFi Technologies, Jean-Baptiste Grafiteau of Bitstamp Europe, Lane Kasselman of Blockchain.com, and others. “We wish to urgently convey our concern with proposed EU laws that threaten the privacy of individuals as well as digital innovation, growth, and job creation in Europe," they said in response to recent EU regulations.
On March 31, members of two European Parliament committees voted in support of the anti-money laundering (AML) regulatory package, which aims to change the existing Transfer Funds Regulation (TFR). The updated TFR poses several legal challenges to "unhosted," or self-custodied wallets. For every transaction conducted between a service provider (usually a crypto exchange) and an unhosted wallet, it would mandate crypto service providers to "verify the accuracy of [the] information concerning the originator or beneficiary behind the unhosted wallet."
The proposal also attempted to oblige crypto businesses to notify "competent AML authorities" of any transfer worth 1,000 euros or more made to or from an "unhosted" wallet, a surveillance level that is even lower than fiat banking operations. If the proposal makes it to the legislation stage, it will impose strict disclosure requirements on non-custodial wallets and crypto exchanges in the EU.
Claiming that recent proposals by EU legislators could make the adoption of Web3 solutions far too complicated for European citizens, the companies have urged regulators to "not exceed the FATF Travel Rule recommendations for Crypto Asset Services Providers ("CASPs") record-keeping and verification" and "ensure that decentralised protocols and entities are exempt from legal entity organisation and registration”.
Other requests included an exemption for algorithmic or other decentralised stablecoins from the asset-referenced token definition of the proposed regulations.
Shashank is the founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash