As published on decrypt.co, Monday 26 October, 2020.
The European Union Parliament’s commission has rejected a petition that proposed to create a superfund for the victims of cryptocurrency-related crimes, according to the agency’s official reply.
Filed earlier this year by UK attorney and solicitor Jonathan Levy, the petition proposed to introduce a “virtually unnoticeable” tax for EU-based cryptocurrency nodes amounting to 0.0001 cent per Euro. The resulting funds were to go toward the creation of a special fund for the victims of cryptocurrency-related crimes, Levy explained.
Even though only a comparatively small number of nodes are located in the EU, the lawyer argued that initiatives like the General Data Protection Regulation (GDPR) had already proven that such efforts can easily become global.
“The GDPR is a good example of how an EU scheme more or less goes global,” Levy told Forkast News. “We don’t need 100% compliance. I believe anyone regardless of citizenship doing business with a crypto asset that touches the EU in some way should be covered.”
In its reply, the EU Parliament’s commission pointed out that there are already a number of initiatives and laws in place to protect victims of violent crime, theft and fraud. They include its recently adopted Digital Finance Package, which aims to provide greater clarity for crypto companies.
“This new proposal will be complementary to the already implemented 5th Anti-Money Laundering Directive in helping to tackle these issues,” the commission stated, noting that “Additionally, bringing transparency requirements to issuers of crypto-assets will help mitigate the risks of fraud, while operational requirements for key crypto-asset service providers is vital to limit the amount of hacks.”
The commission also noted that the examples mentioned by Levy—such as fraud, hacking and extortion—are not specific to the crypto sphere alone. Thus, investors and consumers "have to seek redress through national law enforcement and existing channels," regardless of whether the crimes committed against them involved cryptocurrencies or more traditional assets.
“The Commission suggests that the petitioners continue to pursue their respective cases through national law enforcement agencies and seek compensation through existing channels or with the legal persons responsible for their loss. EU rules on compensation may be applicable in cases of intentional violent crime,” the reply stated, concluding that “The Commission does not have the competence to set up a compensation fund for victims of financial crime.”
According to a report by blockchain forensics firm CipherTrace, various cryptocurrency-related schemes around the world managed to net $1.4 billion in just the first five months of 2020. But for the time being, it looks like their victims won’t be getting any additional help.