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Bitcoin and “unhosted wallets” – Germany opposes the European Parliament

Good news ! Germany opposes to the ban for exchanges to transfer bitcoins to wallets private sector as provided for in the European MiCa bill.

Not your key, not your bitcoin

In a letter from State Secretary Florian Toncar to MEP Schaeffler, the German Ministry of Finance objected to the full verification of wallets “not hosted”

The wallets not hosted (‘unhosted wallet‘ in English) are the wallets that anyone can create to host their own private keys. Their counterpart are the wallets exchanges which, by definition, do not allow you to control your keys. Not your key, not your bitcoin…

The wallets the best known are Samourai, Electrum, blue wallet, sparrow wallet (muun to connect to the Lightning Network).

Find HERE our article on the MiCa law and the part concerning the prohibition of ” unhosted wallets “.

The German Ministry of Finance is also opposed to exchanges can unilaterally report to the anti-money laundering authorities (AML for Anti-Money Laundering) that a transaction is suspicious.

Indeed, exchanges could take advantage of this to block BTC withdrawals under false pretense. Such power can lead to the excesses we have discussed in this article.

According to the letter, the requirements of the European Parliament are difficult to reconcile with techniques for combating money laundering and the financing of terrorism (AML/CFT). They would also go “beyond FATF requirements”.

The FATF (Financial Action Task Force) is an intergovernmental organization for the fight against money laundering and the financing of terrorism. Based in Paris, this organization is often seen as a tool of Western domination. Iran, for example, is a country placed on the FATF red list.

The letter suggests using blockchain analysis tools (Chainalysis) instead to assess the risks when transferring BTC to a wallet private. The Ministry of Finance prefers to stick to the FATF standards implemented in Germany last year.

By the way, Chainalysis estimates that the total amount of crime-related cryptocurrency transactions stood at $14 billion in 2021. Or 0.14% of the total transaction volume.

The firm also reports that laundering accounted for “the equivalent of $8.6 billion in cryptocurrencies in 2021”. That is 0.05% of the total. In other words, we are talking about a storm in a teacup.

This is why the Council of the EU is currently negotiating against these demands at the level of the tripartite negotiations with the Commission and the European Parliament.

The bitcoiners’ efforts to counter the propaganda of MPs like Aurore Lalucq on twitter paid off.

We can read in the letter:

“Concerns about the demands of the European Parliament are also shared by a considerable wave of comments from those in the industry concerned. “

It remains to be seen whether the Council is able to convince the European Parliament in the ongoing negotiations. But the fact that the EU’s largest member state takes this position bodes very well.

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Source: Cointribune

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