Last week, the Financial Action Task Force held a meeting to engage in a dialogue with the private sector on proposed international recommendations to prevent money laundering and terrorist finance activities for virtual assets. Bitonic was also present at the meeting and is very concerned that a far-reaching proposal (7b) will unneccessarily violate the privacy of EU-citizens.
We have subscribed to an industry point of view, that seeks to ensure that the European model from the fifth money laundering directive is used as the basis for all control measures. This means that customer information about crypto transactions is only made available to supervisors and police authorities on the basis of a specific request or observed risk.
In contrast, the rule advocated by the US authorities is that by definition for all transactions with virtual assets, customer information must be passed on to the relevant counterparties (and their supervisors), wherever they are in the world. This is practically undoable, while the relevant authorities can also simply make inquiries with their fellow supervisors to obtain the desired information for each specific case. Experts in the European investigation field also call this proposal by the FATF unnecessary and "overkill".
We believe that it is undesirable from a privacy perspective that the US are forcing the EU to endorse such an alarming obligation, which is not just relevant for companies that are active in the virtual currency space. The definitions are so broad that potentially every company or customer that uses or operates a blockchain or distributed ledger can fall within the scope.Download the statement