EU regulations ignore data protection

A final straight line for the MiCA regulation

The European Parliament is an assembly of elected legislators. The European Council consists of EU heads of state. On October 5, the Council approved the MiCA regulation and other legislation dealing with crypto markets. Parliament is due to meet on Monday to give the texts the force of law. However, these new rules seem to focus a lot on protecting cryptocurrency investors. What about data protection?

MiCA, rules that undermine data privacy

The new European crypto regulations are very focused on investor protection. At the same time, the MiCA regulation makes cryptocurrency business more legitimate and lends credibility to digital assets. Other legislation approved by the Council includes a rule called the Travel Rule. This obliges wallet providers to provide authorities with information about cryptocurrency transactions. Regardless of transaction volume, they must disclose personal information about who is making the transaction and who is receiving it.

In this way, the application of the new European rules may violate the privacy of investors. Perhaps made cryptocurrency platforms less decentralized. Note that with the MiCA regulation, cryptocurrency providers must protect investors’ wallets. Therefore, exchanges and custodians will be held responsible in case of loss of funds invested by users.

This rule puts vendors in a difficult position, as hacks are commonplace in the industry. A recent study by Comparitech revealed that over $7.7 billion has been stolen over the years from cryptocurrency platforms. “If the hackers had kept all the cryptocurrency they stole and cashed in today, they would have a fortune of over $40 billionsaid the Comparitech report.

Anto Paroyan, CEO of crypto hedge fund ARK36, made a statement regarding the new European rules. “The lack of a minimum threshold for transactions to which the Travel Rule would apply, as well as applying the rule to interactions with self-hosted wallets, would no doubt be considered equivalent to an invasion of financial privacy.“, he explained.

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Luke Jose Ajinaku's avatar
Luke Jose Ajinaku

Far from dampening my enthusiasm, a failed cryptocurrency investment in 2017 only increased my enthusiasm. So I decided to research and understand the blockchain and its many applications and to impart with my pen information related to this ecosystem.

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