Ex Bitcoin Foundation Outreach Person Monica Monaco and her regulatory antics exposed in leaked e-mails. Is EU digital currency regulation being driven by Bitcoin insider lobbying?

Cointelegraph gained access to certain emails sent out by Monica Monaco of TrustEUAffairs, which claims to operate in the regulatory affairs consultancy services arena.

We are now releasing excerpts into the public domain to showcase how certain parties are working closely together with The European Union (EU) amid a backdrop of terrorist attacks to bring forth increased regulation.

Before we released this article we sent out some questions to various Members of the European Parliament and got no response.  

Wheeling and dealing in Brussels

The purpose of this article is to showcase the close nexus between Bitcoin insiders and legislators in Brussels and how a very few people are driving policy on virtual currencies, which may affect a whole emerging technology and several of us.

Legislation is often the result of wheeling and dealing and lobbying is certainly something that is a time-honoured tradition. The European Parliament based in Brussels is certainly not immune to it either. It is in fact considered a positive activity by the EU’s own publications.

“The main criticism of the current situation regarding lobbying is the lack of transparency. Meanwhile lobbying is considered a positive element by EU policy-makers insofar as it ensures the participation of social and economic actors in the policy-making process and provides useful information.”  

So when you read this article, this is no way a critique of either lobbying or lobbyists but more so an exposure of the shady backroom dealings of certain people who have formed themselves into workgroups and are exerting pressure in order to gain legitimacy in the eyes of traditional bankers and financial services providers.

Monica Monaco, Founder of TrustEUAffairs

Bitcoin insiders team up to lobby

Monica Monaco is certainly no stranger to virtual currencies or the European Union; after all she was hired by Bitcoin Foundation itself to establish a working relationship with the EU.

At her former employer Visa, she spent a great deal of time as a Manager for EU relations and regulatory affairs. Maybe it is her time at Bitcoin Foundation that enables her to speak with a great deal of confidence when she recently told bankingtech.com:

“This is the first time I’ve worked for an industry that wants regulations.”

Ms. Monaco and her friends seem to have appropriated an industry-wide voice on the issue. In an email that we have which originated from her official account at the domain trusteuaffairs.com on January 27, 2016, she lays the groundwork for a second meeting on February 10, 2016 at Science 14 Atrium, rue de la Science 14b in Brussels.

The recipients of this mail include people like Marcel Roelants of bitpay.com, Laurent Kratz of neofacto.com and Michael Gronager of chainanlysis.com and several others.

The meeting was supposedly to be held between her clients that include the recipients and a delegation from the European Parliament, which included the shadow rapporteurs.

She claims in her email that a detailed agenda was to be circulated a week before the meeting on February 10 and asks the recipients about who all would be participating.

The mail has a MS Word document as an attachment, which contains inputs, which were sent to the European Parliament by her and were constructed on the advice of her ‘working group’.

Ms. Monaco is pushing the idea that somehow getting virtual currencies in a regulatory framework would legitimise their operation and allow players to be accepted by their peers in the financial services industry.

Her inputs to the European Parliament are quite specific and we quote:

“AML/Consumer Protection laws should be applied to the activities/functions being played out in this industry may prove more beneficial to the virtual currencies industry. This would incentivise early ecosystem participants to build out such controls and practices, as most of the industry players are already doing and continue to strengthen.”

The Terrorist Bogeyman and Coffee with Brussels

The terror attacks in Paris and Brussels could not have come at a better time for these champions of Bitcoin regulations.

In a later email dated February 1, Ms. Monaco indulges in a bit of namedropping and goes on to say to her ‘workgroup’, “On a different note, I just had coffee with a contact from the European Commission DG FISMA. I understand they are going to publish this week –very likely tomorrow, the 2nd of February- an Action Plan on anti terrorism, following the Council announcement in December after the 13th of November terrorists attacks in Paris”.

This email also has an attachment that includes her summary of the European Parliament Committee on Economic and Monetary Affair’s Public Hearing on Virtual Currencies that was held on January 25, 2016 between 1500-1630 hrs. This hearing was held for preparing an upcoming own-initiative (INI) report from the European Parliament (Rapporteur: Jakob von Weizsaecker, S&D/DE). The panellists included representatives from the European Commission (DG FISMA) and the ECB as well as academia and stakeholders from the private sector.

US style Bitcoin control for Europe

In submissions to Mr Jakob von Weizsaecker MEP (S&D, Germany), Rapporteur for the European Parliament - INI Report on digital currencies, Ms. Monaco explains in great detail about how the US deals with suspicions financial dealings and how they are reported to the Financial Crimes Enforcement Network (FinCEN), an agency of the Department of Treasury.

Here is an excerpt in her own words, “All money services business (MSB) - businesses that transmit or convert money, hence both banks and non-banks financial institutions - need to monitor and report suspicious activity.”  

What is alarming though is that Ms. Monica and her friends instead of being constructive and creating an European solution for Europe want to impose a US system on a whole continent full of different countries and cultures. She advises the MEP under the header Desirable outcome of the Report, “Some minimum reporting compliance elements –such for example the system in place in the USA – could prove helpful.”

Old wine in a new bottle

When people like Ms. Monica and her friends are the voice of the virtual currency and Bitcoin community, there will always be more of the same old.

Her years of working with regulators give her the idea that only regulations can bring about acceptability.

The broader agenda that she and her friends have is to somehow remove the ‘tarnish’ of operating in an ‘unregulated’ sphere for her clients and make them one with the old boys’ network of the banking industry.

She is certainly not shy about it either as she writes in her concluding remarks, “This would not only help to build the ecosystem, but foster prudent and good players. Furthermore, such a communication coming from the European Parliament should also help players obtaining banking accounts, further contributing to building trust in the banking sector for the virtual currencies industry.”

Maybe Ms. Monica needs to understand that there are no ‘good boys’ and ‘bad boys’ but the fact that the virtual currency realm is the work of several independent people who aimed to create a decentralised model that could sustain itself due to the work of the people involved.

The Bitcoin community does not crave legitimacy and is by design open and transparent. Her work to bring in more regulations is undermining the very structure of independent fintech.

However we can understand that it is very difficult for someone like her to come up with “out of the box” ideas or to propagate them to the powers that be in the EU, a job for which she was hired in the first place not so long ago.