[closewith]

What you are describing is the use of permissionless contracts to avoid AML/KYC compliance law, which is partly what the Directives are designed to criminalise.

> I am not suggesting this exempts anybody from the law, I am suggesting the law is outdated and not compatible with current technology.

AML 5 came into law on the 10th January 2020 (with an enforcement window for transposition into national laws). The law is, as said before, partly designed to close loopholes in the previous Directives that allow high-values transactions to avoid regulation. The law is - for better or worse - keeping up to date. It's simply the case that you don't like the regulation being imposed.

> If the law is that you must handle KYC for > 10ETH purchase, and an anonymous wallet sends you 10ETH in tokens, you should not automatically become a criminal and have your assets seized because of a law that was written before permissionless blockchain networks existed.

I think this really puts your bias front and centre.

[muffinthem]

> What you are describing is the use of permissionless contracts to avoid AML/KYC compliance law, which is partly what the Directives are designed to criminalise.

The goal of this is not to avoid the KYC laws. Unfortunately the technology makes it impossible to comply with them as the laws do not account for permissionless smart contract functionality.

Many artists and corporations are now selling NFTs without the ability to get KYC on every transaction, because this data does not exist on the blockchain and cannot be acquired unless you are a legal authority that has the ability to request private data from a CEX. Saying it “must” be acquired for 10K+ transfers is basically saying those transfers must be criminalized.

NFT sales were not on anybody’s radar before 2021, especially not EU lawmakers. In the next few years it seems likely there will be more regulatory clarity so that people can make taxable income on NFTs without being treated as criminals as in the OP case.

> I think this really puts your bias front and centre.

How so? It is clear to me this law is not compatible with the way the blockchain works and the OP being criminalized for selling art is a good example of how it will hurt regular citizens. Meanwhile corporations and brands selling NFTs probably will be fine as they have larger legal teams and regulators are less likely to try and fight them.

The solution to this AML law is either to treat all these blockchain transactions as illegal and continue to criminalize the behaviour, as you are suggesting, or to define new laws that take into consideration the way that blockchain transactions do not allow sellers to request KYC, and instead push that AML reporting requirement on the CEXes.

[closewith]

Your argument seems to rest on the idea that regulating high-value transactions on a blockchain is an unintended side-effect of AML5 (and the upcoming strengthened AML6).

If so, you are delusional. Lawmakers are not going to carve out an exemption for blockchain transactions when the explicit goal of the EU is to bring them under robust regulation.

Once again, the outcome that is upsetting you is the intended goal of the Directives. If in doubt, Google “AML5 crypto”. After all, it is the Directive that brought crypto exchanges under AML rules and almost certainly is the reason that the OP (irrespective of whether they broke any rules) came under investigation.

Finally, I believe your own biases hide from you how similar this legislation is when applied to fiat, barter, and crypto transactions.

In the EU, you cannot lawfully undertake high-value transactions without KYC. Whether you agree with that or not (and I don’t), it is the law of the land, widely accepted and implemented, and not unpopular. Sort of a legislative change of tack, regulation will continue in this vein.

[muffinthem]

I am not saying it is not the law - I am saying the law is ridiculous and incompatible with how users are choosing to transact through permissionless blockchains like Ethereum. I recognize that the OP is being criminalized and I am saying he should not be treated as a criminal for selling art through NFTs simply because there is no regulatory framework for dealing with the lack of KYC on transactions above an arbitrary threshold. If you feel this opinion is delusional I’m not sure it’s really worth continuing this discussion.

[gizmo]

One of the primary ways of fighting organized crime is by going after the money. If you can stop people from enjoying the spoils of their crime you win. It’s a constant battle. If illicit funds are funneled through shell companies and a dozen different jurisdictions there is almost no way to prove the money is dirty anymore. So governments pass laws to force transparency.

That’s why companies have to report who their Ultimately Beneficial Owners are, and that’s why there are reporting requirements for the kinds of transactions that are used for money laundering.

Money laundering is a big deal and governments around the world are fighting hard against it. Crypto has gotten too big and now it’s getting regulated. People who believed wrongly that the law wouldn’t apply to them are now getting a wake-up call.