Bitcoin plunges after European Parliament passes privacy law

With a 4% drop in the last 4 hours, Bitcoin appears to be affected by the passage of the Anti-Privacy Law by the European Parliament. The proposal will now go through a plenary session before it becomes official.

If approved, this could completely change the way the market moves funds, primarily affecting cryptocurrency exchanges, and thus their users. In addition to making corporate activity more expensive, whose value will pass on to users, it also ends with their privacy.

Voted 2 weeks later Parliament votes against ban on bitcoin mining And other cryptocurrencies that use Proof of Work. They got it right once, but they missed this last chance.

Focus on non-wallets

The main focus of the law, passed by the European Parliament, is to end the privacy of cryptocurrency users who use non-third-party wallets. That is, any wallet has its own keys for the user and does not give any information to third parties.

Therefore, every time you need to make a deposit on an exchange, you will need to prove that the source address belongs to you, or to make it more difficult, to someone else. This point was highlighted by Coinbase founder Brian Armstrong.

“This means that before you can send or receive cryptocurrency from a self-hosted wallet, Coinbase will need to collect, store and verify information from the other party, which is not our customer, before allowing the transfer.”

4/ This means before you can send or receive crypto from a self-hosted wallet, Coinbase will be required to collect, store and verify information about the other party, who is not our client, before allowing the transfer.

– Brian Armstrong – barmstrong.eth (@brian_armstrong) March 30, 2022

Following on, Armstrong also explains that Coinbase will be required to notify the authorities every time you receive €1,000 or more in one of these wallets, even if the transaction is not suspicious. Obviously, this only includes Coinbase, but all the exchanges that operate in Europe.

Going forward, other countries can easily copy such a law, which increases the costs of operating such companies – which will obviously pass on to their users.

However, the main point is the loss of privacy because governments will be able to create a comprehensive database of reference information and ‘name addresses’. Moreover, it is not difficult to imagine that this data could leak out, and fall into the hands of other fraudsters outside the government.

The community has already reacted to address labeling

In January of this year, some wallets began implementing solutions that It will facilitate identity verification of addresses for Bitcoin and other cryptocurrencies. However, many abandoned the idea after community feedback on the matter.

One of the highlights was Trezor hardware wallet that quickly abandoned this function. However, if the law is finally passed, cryptocurrency users will not have many options, either to give up their privacy, or give up services that present more risks.