Ledger’s CEO Fears that a New European Law Would Encroach Privacy

Last week, the EP passed due diligence checks for crypto transfers as part of the amendments made to the EU’s Transfer of Funds Regulation (TFR) bill, which is yet to be approved by EU capitals.

The EP intends to preclude criminals from using cryptocurrencies for illicit purposes. According to the new rules, companies will be required to check who sends funds and who receives them.

Although crypto behemoths argue that blockchain’s transparency and immutability already provide a comprehensive picture of where the assets are sent, the EP does not fully buy that argument.

The industry leaders' chief concern is that the new law will result in the creation of a police state, with authorities tracking everyday payments with crypto are tracked and stored. While the EP rejects that claim, it could indeed make it more difficult for people to hide their identity from Russian authorities when sending crypto to help Ukraine or support Kremlin critic Alexei Navalny.

Imagine you have a wallet, your leather wallet, and you’ve got cash in it. Now every time that you’re going to pay in cash somewhere, you’re going to have to flash your ID … and they’re going to note your name.This is not the world I want to live in.

– Gauthier said.

He added that he fears that because of the pandemic and the omnipresent requirement to show vaccine passes, people are slowly sleepwalking into a surveillance state.

Ernest Urtasun, a Spanish MEP advocating the new rules, disagrees with the police state argument.

“If you pay to purchase goods or services with your Mastercard or with your mobile phone with crypto,” Ernest Urtasun, a Spanish MEP said, explaining that the rules only apply when people try to move funds from one location to another. “We legislators anticipated the possibility that if this becomes a means of payment … we should apply the same rules as [standard currency]”

Gauthier also states that the law is the EP’s latest move to kill off the industry, referring to the rules advocated by the Left-Green bloc in Parliament that fell short of phasing out the blockchain technology due to its high level of energy consumption.

“Some groups in the European Parliament have some very specific and dogmatic agenda … [and are] using excuses to ban Bitcoin and cryptocurrencies as much as possible,” Gauthier said. “Rumors they’ve heard. Like, oh, I heard it’s for money launderers. Come on, guys. Let’s be professional.”

The rules will be reviewed by representatives of EU member states in the coming weeks.