The European Union seems to have launched a new attack on the crypto industry. This time it concerns information about the crypto assets of users. According to the EU Commissioner of Taxation, Paolo Gentiloni, there will be an awful lot missed tax on crypto profits. So he now demands that crypto companies in Europe provide information about the crypto holdings release from users.
EU is missing out on 2.4 billion euros in taxes
“Anonymity means that many crypto owners with substantial profits fall under the radar. This is not acceptable.”
According to Gentiloni, the European tax department loses 2.4 billion euros annually due to inadequate information about European crypto owners. Gentiloni wants to change this. However, no details have yet been revealed about how Gentiloni plans to put his idea into action. The complication here is that many crypto companies have no legal home. This makes it very difficult to impose such requirements on companies.
Another complication is the security of this information. Such data on users’ exact crypto holdings is the holy grail for crypto scammers. Should this data fall into the hands of criminals, this significantly increases the vulnerability of crypto owners. The proposal of the EU Commissioner will result in crypto exchanges collecting and storing this data. This data will then reach the European Union, which must also be able to secure this highly sensitive information.
MiCa crypto law is still waiting
Currently, the European Union is developing a comprehensive crypto law. This legal stronghold, Markets in Crypto Assets Regulation (MiCa), must realize European crypto regulation. In June this year, the European member states jointly gave the green light for the development of the MiCa law.
Actually, a final round of voting on the law was supposed to take place in parliament in November. However, they had forgotten that a comprehensive translation into 24 European languages still had to be prepared and that will take some time. The voting round has been moved to February 2023.
After that, preparations for the entry into force of the MiCa law can be started. A conservative estimate puts that moment somewhere in 2024, but it is also possible that a working crypto law will not be active in the European Union until 2025.