Luxembourg Finance Minister Pierre Gramegna is pushing for greater clarity in Luxembourg’s laws and regulations related to blockchain technologies. This clarity, he says, will reassure investors and entrepreneurs who want to build on blockchain technology but have hesitated because the laws surrounding this space aren’t clear. Gramegna has listed transactions over blockchain as a special legal concern.
Speaking with CoinIdol, he said of the issue:
“The goal is to make sure that, if you do transactions using blockchain, they have legal certainty and the same legal strength as if you had done the same transaction without using blockchain, in a traditional manner.”
In a response to Gramegna’s request, the Luxembourg Parliament has received a draft clarifying the rules surrounding blockchain transactions. It will likely be debated after the general elections on October 14, and following the swearing-in of new Parliament members on October 30. However, the bill is likely to be delayed due to the amount of proposed legislation being considered by Parliament.
Clarity Requested on Worldwide Regulation Of Crypto
Pierre Gramegna has also mentioned that the European Union should also consider a standardized regulatory code that will apply across all member nations. It is important to note, however, that the European Union has already passed some cryptocurrency- and blockchain-related regulation in order to combat money laundering and the funding of terrorism.
U.S. lawmakers have insisted that the SEC should provide greater clarity for cryptocurrency regulation. Top cryptocurrency and blockchain firms, like Coinbase, Polychain Capital and Circle, have also formed a Blockchain Association as a lobbying and public education organization to push for regulation that is friendly toward the industry. Some cryptocurrency insiders have also said that there should be one regulatory agency in charge of cryptocurrency regulation instead of the alphabet soup of agencies who all seem to want their own slice of the pie.
Is Cryptocurrency-Related Crime a Big Deal?
A recent Wall Street Journal report did indicate that ShapeShift may have enabled up to $90 million in cryptocurrency-related money laundering, as criminals seek to dump their bitcoins in exchange for more anonymous currencies. A similar report from Interpol shows that Bitcoin is the favored currency of cybercriminals, but terrorists favor privacy coins like Zcash and Monero.
This could be compared to the billions of dollars that banks can be found responsible for in a single money laundering case. Nigeria is currently embroiled in a dispute with HSBC that includes its role in a $4.3 billion money laundering case masterminded by its former dictator, for instance.
Regulators seem to have a knee-jerk reflex that anyone who wants to access exchanges, banking services, and any other service in the financial industry also wants to use it for financial crimes, hence the stringent KYC/AML regulations. Any “clarity” is likely to double down on this type of regulation to the detriment to people who cannot establish their identity or do not wish to have their every financial move tracked even though they are doing nothing wrong.
Will Luxembourg or any other government consider the issues of bank-enabled money laundering or the further exclusion of marginalized or privacy-centric populations? Probably not. They will only be concerned with providing greater clarity to investors who may only care about maintaining the status quo rather than enabling financial innovation. Basically, expect more of the same old stuff.