Open Letter

Industry representatives call the authorities not to go beyond the scope of the FATF Travel Rule recommendation.

Forty crypto companies cosigned an open letter to the European Parliament, European Commission and other principal E.U. institutions with a call to ensure common-sense regulation, standardized compliance procedures, and an innovation-friendly business environment. 

An open letter on behalf of the international Web3 community and “businesses across Europe,” shared with Cointelegraph by one of the signatories, went out to EU institutions on April 19. The industry players expressed their concerns over some recent EU-level regulatory initiatives:

“We wish to urgently convey our concern with proposed EU laws that threaten the privacy of individuals as well as digital innovation, growth and job creation in Europe.”

More specifically, the cosigners claimed that recent proposals by some EU legislators, such as data disclosure requirements for non-custodial crypto wallets, can make the adoption of Web3 solutions excessively burdensome for European citizens.

The crypto stakeholders encouraged regulators to “not exceed the FATF Travel Rule recommendations for Crypto Asset Services Providers (“CASPs”) record-keeping and verification” and “ensure that decentralized protocols and entities are exempt from legal entity organization and registration.”

Related: Unhosted is unwelcome: EU’s attack on noncustodial wallets is part of a larger trend

Other requests included the exemption for algorithmic or otherwise decentralized stablecoins from the asset-referenced token definition in the proposed EU Regulation on Markets in Crypto Assets, or MiCA.

Among the stakeholders that have signed a letter are Pascal Gauthier of Ledger, Diana Biggs of DeFi Technologies, Jean-Baptiste Grafiteau of Bitstamp Europe, Lane Kasselman of Blockchain.com and others.

On March 31, members of two European Parliament Committees voted in support of the Anti-Money Laundering (AML) regulatory package that seeks to revise the current Transfer of Funds Regulation (TFR) in a way that requires crypto service providers to “verify the accuracy of [the] information concerning the originator or beneficiary behind the unhosted wallet” for every transaction made between a service provider (typically, a crypto exchange) and a non-custodial wallet. Many prominent founders and executives in the crypto space condemned the move, calling the requirements excessive and unfeasible.