“After a decade of mass surveillance, IT has proven its usefulness
more about curbing freedom than fighting terrorism. »
This is what he wrote Edward Snowden in his book Mémoires Vives. 10 years ago, this former NSA employee exposed for all to see vast mass surveillance program carried out in secret by the US government.
In this video, we talk about a new directive from the European Union which directly attacks your privacy and the crypto ecosystem as a whole. This new measure is called DAC8 and its adoption changes just about everything for you. Tracing all transactions, leaking your personal information, automatic declarations of your crypto wallets… I explain all that to you in this video.
Europe regulates and acts, the USA acts and regulates
But first, let’s go back a little. As you probably know, regulation of the crypto industry has been moving forward by leaps and bounds since last year, whether in Europe or across the Atlantic. While on the United States side, the SEC doesn’t seem to want to give up by increasing attacks on the ecosystem. In Europe, the story is a little different.
You know the adage,Europe regulates then acts, the United States acts then regulates. And when it comes to regulation, the European Union seems determined to make life difficult for crypto. Thus, last June, we were able to witness the publication of the MiCA regulations in the Official Journal.
To quickly explain, this publication is the step after the adoption of a law in the EU legislative process. As a reminder, MiCA is the legislative framework that we saw born in 2022 and which aims to create a coherent and uniform regulatory environment for the cryptocurrency sector in
Well, the stated objectives of this regulation are rather simple: fight against money laundering and the financing of terrorism, consumer protection, regulation of companies in the sector… You know the drill. MiCA raises a lot of fears from the ecosystemand that’s normal.
Already, the current wording of the law is very vague on the categorization of crypto assets. In the text, cryptocurrencies are classified into three potentially ambiguous categories and considered unclear with regard to the current reality of the crypto industry. In addition, certain restrictions, such as those imposed on token issuers for example, are considered excessively restrictive, endangering innovation in the sector in Europe.
Moreover, let us say it, MiCA does not really seem to recognize the innovation brought by the industry, further endangering those wishing to do business within European jurisdiction. Just last Thursday, the legal manager of Binance France deplored that Europe was heading towards a outright delisting of all stablecoins by next year. Anyway, that’s where we were until now.
I say so far, because a new regulatory layer seems to want to be added alongside MiCA by MEPs. This new framework is named DAC8 and is none other than the continuity of all European directives on administrative cooperation.
These guidelines contribute to harmonize tax practices and to promote a
fair taxation within the EU. So far, there were seven which covered a rather broad spectrum of financial information concerning both taxpayers and businesses. Please understand that all this information is collected and exchanged, often in an automated manner, between Member States.
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DAC8 or cryptos under close surveillance
At the beginning of September, a new directive supplemented the previous ones. It is therefore the famous DAC8voted and approved on September 13 in the European Parliament with nearly 535 votes in favor to 57 votes opposedjust that.
Okay, but what is so interesting about this new regulatory framework and how does it concern us? Don’t move, we’ll figure this out together.
Basically, the text foresees there monitoring of all cryptocurrency transactions carried out by organizations operating in member countries of the European Union with a stated goal similar to MiCA, preventing fraud, tax evasion, and money laundering.
When I say full surveillance, This is not a joke. Companies will have theregulatory obligation to transmit the activity of all their users to the tax authorities on which they depend. In addition, they will have theobligation to communicate automatically this information to the tax authorities of the country of residence of each user. The scope of this law is very broad.
First, it applies to almost all cryptos, from payment tokens to tokens representing company shares, including stablecoins and certain NFTs. Basically anything that can be used as a means of payment or investment.
Concerning the information, it goes from name to postal address including date of birth and tax identity number. But that’s not all, as we’ve said, it also concerns transactions. The text provides that exchanges will have to communicate all transactions carried out during the year by their users, this concerns withdrawals and deposits of course, but also all exchanges, whether from crypto to fiat, or from crypto to other cryptos. Staking, lending and airdrops are also included.
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Guidelines that concern us all
Moreover, one might believe that this text only concerns exchanges, but not really. In fact, it absolutely covers all legal entities that provide services on crypto-assets. More precisely, the scope provides for two types of actors.
Those they call crypto-asset providers and those they name crypto-asset operators. The first category is the exchanges and all companies which offer custody, exchange, trading, placement, transfer, and even advice. In short, all those who are already affected by the MiCA regulations. The second category is more folkloric and broadly speaking, it concerns everyone who touches cryptobut which cannot be qualified as financial institutions by MiCA.
In the text, they talk about NFTs, we can for example think of everything related to the GameFi sector. We have already told you about Ultra, the platform that wants to tokenize your games and compete with Steam. The company may well fall into this category. If this is the case, Ultra will have to make sure to communicate to the authorities each purchase and sale of games, and even each in-game transaction. Imagine, you buy a sword in your favorite game and the entire French tax administration finds out about it… In short, suffice to say that pretty much all companies having an activity related to cryptocurrencies are concerned.
Obviously, the text provides that in the event of incomplete, incorrect or false data, rather steep fines will be distributed. The minimum amount thereof will be one hundred and fifty thousand euros for entities whose turnover exceeds 6 million euros.
It is important to understand here that all this will be automated to enable communication and fluidity of information on a European scale. This is a true paradigm shift and a turning point in what awaits us with respect to future regulation of the industry. Yes, as some have explained very well, where it was very complicated for the tax authorities to obtain certain information, these directives will change everything and offer them an overview of the accounts and activities of all users .
Obviously, there were criticisms. Beyond theintrusive aspect of the DAC8, some argue that this adds extreme administrative burden. Also, passages could lack clarity and lead to poor interpretations of the text. Finally, there are fears of a lack of efficiency, given the risk of collecting certain information several times.
In any case, the Member States of the European Union have until December 31, 2025 to learn about and adopt this new regulation which will take effect from 2026. And don’t think that you will be able to escape so easily, since using foreign platforms will not save you. In practice, it is very likely that in the long term, companies that are not regulated in Europe will simply be prohibited from serving European customers.
Since identity verification procedures for this kind of service have almost become the norm, it won’t be so easy to evade. Some see a new golden age of DeFi on the horizon. The idea is that decentralized finance protocols could indeed make it possible to escape this surveillance and slip through the cracks.
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