The Future Of Crypto Regulations May Be Very Centralized: CryptoExpo Europe Experts

At CryptoExpo Europe in Bucharest, experts discussed how upcoming laws will impact the crypto industry. The main concerns were stricter compliance, AI’s growing role, and the shrinking space for financial privacy.

One of the biggest gaps in Europe right now is the lack of clear tax rules for crypto transactions. In countries like Romania, trading isn’t illegal, but there’s no official way to record or tax transactions. Without clear guidelines, businesses struggle with compliance, and governments could step in with stricter policies at any time. (Flavius Jakubowicz, Managing Partner, Jasill)

AI is becoming a game-changer in compliance monitoring. Some exchanges already use AI to flag suspicious transactions and ensure they meet legal requirements. The idea is that AI can make compliance more efficient while reducing human error. While it may seem like a burden, compliance is necessary for crypto to operate legally. (Stephen Hudson, AML/CFT Lead, Kraken)

The EU Anti-Money Laundering (AML) directive is expected to bring changes, though not dramatic ones. The main shift will be a standardized definition of money laundering across Europe. Authorities will also have more control over tracking the actual owners of crypto businesses, increasing transparency requirements. (Bogdan Rotaru, VD Law Group)

Data sharing between agencies and crypto exchanges is increasing, raising concerns about financial privacy. Some exchanges have already been required to disclose transaction data for privacy-focused coins like Monero. This shows how difficult it is becoming to keep transactions anonymous, as regulators push for more oversight. (Stephen Hudson, AML/CFT Lead, Kraken)

New rules will also mean tougher KYC (Know Your Customer) and KYB (Know Your Business) requirements. Crypto platforms will need to document where funds come from and why they are being transferred. If authorities believe a transaction is unclear or suspicious, they may reclassify it and impose higher taxes. (Flavius Jakubowicz, Managing Partner, Jasill)

Another major challenge is accounting for crypto volatility. Since prices fluctuate daily, it’s difficult to determine the taxable value of crypto holdings. Traditional accounting methods don’t fit well, and authorities may reject certain valuation models. (Flavius Jakubowicz, Managing Partner, Jasill)

A key concern from the audience was about irreversible transactions ( a question that floats around since the very beginning of the crypto world): what happens if someone sends funds to the wrong blockchain? Right now, there’s no regulatory fix for this, highlighting the need for both technical and legal solutions to improve transaction security.