Response to consultation on Guidelines on preventing the abuse of funds and certain crypto-assets transfers for ML/TF (Travel rule Guidelines)
Question 1. Do you agree with the proposed provisions? If you do not agree, please explain how you think these provisions should be amended, and set out why they should be amended. Please provide evidence of the impact these provisions would have if they were maintained as drafted'?
As a person who lives in European Union I disagree with idea of hard regulations of crypto space because it won't really help with blocking money flow into bad entities(Terrorist organizations for example). According to the study by IZA ". US$ 500 to 800 billions a year – comes out of developing and transitional economies. These are countries that often have the weakest legal and administrative structures, the largest criminal gangs of drug dealers, and, far too often, economic and political elites who want to take their money out by any means possible. " Which in fact means that cryptocurrencies do not have a significant role in money laundering and sponsoring terrorism. If European Union wants to fight it, they should focus on banking systems instead in countries like Romania, Hungary etc which are affected by corruption. I have also to point out the fact that malicious entities can purchase KYC and essential information from people who live in poor countries like India, China, Pakistan for 50$. So, essentially by regulating crypto space and forcing KYC and gathering a lot of data you would only harm average person that has nothing to do with terrorism and money laundering.
Link to the study by IZA: https://docs.iza.org/dp4860.pdf