The IRS will scan transactions of Poles. No more anonymity in code since July 31?

dailyblitz.de 17 hours ago

As of 31 July, fresh EU regulations came into force, which sparked a wave of speculation about the end of anonymity in the planet of cryptocurrency. The headlines in the media say that the treasury and another authorities will gain full insight into transactions of Poles, hitting the fundamental rule of digital assets. But reality is much more complex. Although regulations actually tighten the loop around stock exchanges and exchangers, the key feature of cryptocurrency – the anticipation of anonymously transferring funds – remains intact. The fresh law introduces crucial changes, but mainly for those who usage centralised intermediaries. This means that law enforcement and fiscal authorities gain powerful control tools, but only in certain situations. In practice, the European Union is trying to civilise the market, not destruct its foundations. It is crucial to realize who and under what circumstances the fresh responsibilities will be affected and where there is inactive a “luke” to keep full privacy.

What precisely has changed since July 31? fresh obligations for stock exchanges

The confusion surrounding the alleged deanonymisation of cryptocurrency transactions stems from 2 key legal acts of the European Union: Markets in Crypto-Assets Regulation (MICA) and Transfer of Funds Regulation (TFR). Although they had already entered into force, it was on 31 July 2024 that the transitional period for TFR ended, which means that providers of crypto-activators (so-called CASPs) must full comply with fresh strict rules. In practice, this applies to all entities utilized by most Poles – cryptocurrency exchanges, online exchangers or trust portfolio operators.

The main change is the implementation of the alleged ‘travel Rule’ (travel rules), known from conventional banking. According to it, each intermediary must collect, verify and transmit together with the transaction the details of its participants. This means that the exchange from which you send funds will gotta get and make available to the recipient platform information specified as:

  • Name of consignor
  • Payment account number or wallet address
  • Address, identity card number or date of birth of the consignor
  • Name of consignee
  • Payment account number or wallet address of the payee

These obligations are aimed at preventing money laundering (AML) and terrorist financing (CFT). For the user this means no longer trading on stock exchanges without full identity verification (KYC). Platforms will gotta implement additional mechanisms, specified as Satoshi's test (a micro-transaction message to verify portfolio control) to guarantee that the data is true.

1000 euro threshold. erstwhile will the IRS find out about your transaction?

The fresh regulations introduce a key financial threshold that determines the degree of the data collected. Transactions with a value exceeding EUR 1000 will be subject to the strictest control. In the case of specified transfers, the stock exchange will be required to verify the identity of not only its client but besides the recipient of funds, even if this 1 uses a private, unhosted portfolio. This is simply a immense change that is intended to prevent crucial amounts being sent to anonymous portfolios through regulated platforms.

What does this mean in practice for the average Kowalski? If you buy Bitcoin for PLN 5000 on the Polish or European stock exchange and want to send it to your private hardware portfolio (e.g. Ledger or Trezor), the stock exchange will gotta collect and store information about this transaction, including the address of your private wallet. This data, at the request of the applicable authorities – specified as the National taxation Administration (KAS) – will should be made available. This gives the fiscal a powerful tool to verify whether Poles correctly account for capital gains from cryptocurrency.

However, it should be stressed that offices will not receive automatic, permanent access to all transactions. Data will be made available in circumstantial control procedures or on the basis of a reasoned request. Nevertheless, the threshold of EUR 1000 is simply a signal that the "wild-west" era on centralised platforms has come to an end and that the state authorities have gained real traceability of financial flows.

Private wallets are inactive an oasis of anonymity. What is the gap in the system?

The most crucial information that sensational headlines ignore is the fact that EU regulations are not and may not apply to direct transactions (peer-to-peer, P2P). If you have cryptocurrency on your private, non-custodial wallet, to which only you have private keys, you can send it to any another private wallet without any intermediaries. specified a method transaction is full cryptographic and is outside the scope of TFR and MiCA.

This action can be compared to handing over cash. The government regulates banks and flows in the banking system, but has no control over whether you give your friend 100 PLN in cash. likewise with cryptocurrency – regulations include the “banks” of this world, i.e. stock exchanges and cantors, but not direct interactions between users. The blockchain only records the transfer of funds between 2 public addresses ( portfolio IDs). Without additional information obtained from centralised intermediaries, linking these addresses to a circumstantial individual is highly hard and frequently impossible.

This “lack” in the strategy is actually a fundamental feature of blockchain technology. It ensures that cryptocurrency can inactive service as a tool for maintaining financial privacy, as long as the user deliberately avoids regulated intermediaries. This is why the experts stress that the reports of the "end of anonymity" are greatly exaggerated.

Legendary transaction for PLN 34 billion. Proof that privacy inactive exists

Nothing portrays the power of anonymity in P2P transactions like the events of July 4, 2024 that shook the cryptocurrency world. On that day, someone, after 14 years of deficiency of activity, sent from 1 private wallet to another 80 000 bitcoins. At the time of the transaction, their value was almost PLN 34.2 billion. It was 1 of the largest one-off transfers in cryptocurrency history.

All we know about this giant operation is that it happened. The remainder are just conjecture and speculation. On-chain analysts propose that the measures may have belonged to Roger Vera, an early investor and promoter of Bitcoin, known as ‘Bitcoin Jesus’, who is presently under home arrest in Spain. But there's no hard evidence. The identity of the wallet owner and the recipient of the funds remains a mystery. This transaction is the final proof that, regardless of EU regulation, the transfer of immense values in a full private manner is inactive possible if it takes place outside the ecosystem of centralised exchanges.

In conclusion, the fresh rules are not a revolution, but an evolution towards greater transparency in the cryptocurrency market. They hit the anonymity of transactions carried out through stock exchanges, giving the treasury and another authorities control tools. However, the core of technology and its ability to supply privacy in direct transactions stay intact. The end of anonymity is simply a myth, but the beginning of a fresh era of supervision has become a fact.

Read more:
The IRS will scan transactions of Poles. No more anonymity in code since July 31?

Read Entire Article