Category Archives: EU regulations

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Poland Reaffirms Crypto Exchanges Still Legal Nationally

The Polish Financial Supervision ‎Authority (KNF) reaffirmed the country’s position regarding the legality of cryptocurrencies this week, in reaction to media accounts suggesting Poland is looking to prohibit all activity on cryptocurrency exchanges.

False reports of a crypto ban

While Poland did announce a government-led investigation into cryptocurrencies, allegations reportedly made by mainstream media outlets suggested that Poland was looking to ban all activities on cryptocurrency exchanges.

The KNF released a statement on their website to put truth to the claims, stating cryptocurrency assets and trading are “legal on the territory of the Republic of Poland”, as reported by Finance Magnets.

It is likely that the media outlets wrongly interpreted the investigation as signaling a clampdown, which the KNF has assured citizens it is not considering right now.

Several crypto areas are regulated

Several specific areas of cryptocurrencies are regulated by Polish officials, however, in much a similar way to other European states that look to prevent criminal activity in the sector.

New EU regulations have required Poland to update its cryptocurrency laws in order to align them with anti-money laundering and counter-terrorism financial legislation, with the policies due to be enacted on 13 July.

Poland’s ban on initial coin offerings still remains, with authorities campaigning to educate citizens on the associated risks of cryptocurrency trading. The campaign notes a lack of regulation as a potential facilitator for fraudulent activities to take place.

Last month, Poland’s largest cryptocurrency exchange BitPay left the country for the Republic of Malta, citing a lack of cooperation from Polish banks as the cause.

While this announcement came as a surprise to many considering several Polish banks’ recent blockchain testing, it would appear the country still has a ways to go if it is looking to be seen as a crypto-friendly nation.

 

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New EU Privacy Laws Brings Parity’s PICOPs to a Halt

New General Data Protection Law (GDPR) guidelines have led to the shutdown of the Parity ICO Passport Service (PICOPS). The main conflict is between blockchain’s immutability and GDPR’s right to deletion of data clause.

With fines getting as severe as EUR 20 million, it has prompted other cryptocurrency companies to clean up their act as well. Trading platform LocalBitcoins recently made changes to their terms of services, which will come into effect on 25 May.

The service will cease to exist from 24 May due to these interpretations. Since PRICOPs allowed anyone to assign an Ethereum address to a unique identity, one could see how it involved personal data.

IF PICOPS was adjusted to make the service GDPR compliant, PICOPS would only be able to offer a “very limited set of features”. The amount of resources required to make the service GDPR compliant simply would not be worth the features PICOPS would be able to offer.

“Because of this, the significant resources required to make PICOPS GDPR-compliant, and the fact that PICOPS is not part of our core technology stack, we have decided to discontinue the service despite overwhelming market needs and demand,” said Parity.

Parity’s shutdown of PICOPS comes after a busy year for the Ethereum client, assisting in many ICOs and token sales in 2017. Parity was also in headlines for two hacks, resulting in over USD 300 million in ETH gone.

What effect this has on the ICO market going forward is still unknown. Ethereum has become the de-facto standard for issuing tokens due to its smart contract capabilities, but with PICOPS gone, this gives other platforms a shot.

Despite the shutdown of PICOPS, Parity is working with regulators to inform them on what potential effects laws may have on the industry.

 

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New KYC Regulations in EU Validate Crypto Trading

In an effort to prevent financial transgressions, the European Union now requires cryptocurrency exchanges to apply know-your-customer (KYC) policies, similar to that required by traditional banks in a move beneficial to the legitimacy of cryptocurrency trading.

Crypto crime prevention

The anonymity surrounding cryptocurrency trading is viewed by many as an enabler of fraudulent activities, money laundering, and terrorist financing. As reported by Reuters, increasing the transparency required by exchange platforms is valuable in countering any negative perceptions around the usage of cryptocurrencies.

With all investors in the industry now required to provide proof of identity when joining exchange platforms in the EU, this will make it significantly easier for law enforcement to trace any cryptocurrency users involved with illicit activities. It also increases the difficulty for potential hackers to access online wallets or exchanges.

The regulation from EU legislators should not be interpreted as a condemnation of cryptocurrencies; on the contrary, it is a move to legitimize and regulate the market for the benefit of investors, and the economy.

Not all those in the crypto sphere are a fan of KYC barriers though, as it goes against the concept of anonymity, the philosophical foundation behind blockchain technology. With incognito transactions being conducted, however, there always runs the risk of fraudulent activity, despite less than 1% of Bitcoin transactions to exchanges found to be guilty of this.

Pursuing blockchain

The EU signed a Declaration on the Establishment of a European Blockchain Partnership on April 10, with the aim of establishing the continent as an international leader in blockchain technology. As reported by Bitcoinist, the partnership claims to be a ”vehicle for cooperation amongst Member States to exchange experience and expertise in technical and regulatory fields”.

The regulatory move from the EU follows the continued pursuit of anti-money laundering and terrorist financing policies targetting many areas of finance and traditional banking, not merely restricted to cryptocurrencies.

 

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