That's nonsense. There's nothing preventing KYC for any business transaction. It won't happen on the blockchain, but entities operating in the EU who forgo compliance will end up subject to investigation when they interact with the financial system, as may have happened in this case (again, I'm not supposing that the OP did anything wrong).
> The law as it is currently defined is not compatible with the technology and will need to be revised if the law wishes to consider NFT as high value art sale.
This is complete nonsense. The medium of transaction is neither inherently compatible or incompatible with the law, and entities which try to use it as an excuse to avoid their compliance obligations will find themselves subject to government investigation and sanction.
The idea that you can pretend that a technical implementation can exempt you the law is so outlandish and absurd that I wonder if you're trolling?
> The idea that you can pretend that a technical implementation can exempt you the law is so outlandish and absurd that I wonder if you're trolling?
I am not suggesting this exempts anybody from the law, I am suggesting the law is outdated and not compatible with current technology. If the law is that you must handle KYC upon receiving $10K USD in tokens, 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.
If I sold a car that was deliberately unsafe, I wouldn't expect people to come to my company's defense and say that being safe in my car isn't possible and therefor the law is outdated and not compatible with current technology.
> I am not suggesting this exempts anybody from the law, I am suggesting the law is outdated and not compatible with current technology.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.
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.
