European Union Implements Ban on Anonymous Crypto Transactions via Self-Custody Wallets
The latest Anti-Money Laundering law explicitly forbids some restrictions for cash transactions and unnamed cryptocurrency payments.
In a fresh regulatory change, the European Union (EU) has banned the utilization of unidentified self-custody crypto wallets for cryptocurrency transactions of any value. The update is an element of the region’s most recently executed Anti-Money Laundering (AML) guidelines.
EU Sanctions Crypto Payments to Unregistered Wallets
A post by Patrick Breyer, a member of the European Parliament for the Deutsch Piraten Partei, revealed that most of the European Union’s Parliament approved the ban on March 19.
Dr Breyer was one of those who rejected the approval. The other Parliament member who opposed it was Gunnar Beck. The sanction on cryptocurrency payments applies explicitly to unregistered wallets provided by service providers, covering self-custody wallets offered through desktop, mobile, or browser apps.
The most current AML rule particularly bans certain restrictions for cash transactions and unnamed cryptocurrency payments. Under these guidelines, cash transactions surpassing €10,000 and anonymous cash payments exceeding € 3000 will be considered unlawful.
EU Ban on Anonymous Crypto Transactions
The ratified regulations are anticipated to be fully active within three years of implementation. Nevertheless, Dillion Eustance, an Irish law company, expects the rules to become operational before normal enforcement.
Several cryptocurrency networks function within permissionless environments, permitting people to develop a cryptographic private key and offering unhindered entry into the system. The characteristic lies at the core of cryptocurrencies’ main principles, providing a more unconventional, inclusive, and equitable financial system that does not discriminate against its users.
According to freedom advocates and experts, the latest approval is a blow against financial freedom and fundamental human rights. Patrick Breyer, German MEP, is against the bill, noting it jeopardizes financial privacy and economic autonomy. Additionally, he believes the capability to transact anonymously is a fundamental right.
Crypto Industry Criticises EU Regulatory Approach
The crypto industry, famous for its focus on decentralization and privacy, has answered critically to the European Union’s regulatory approaches. The new guidelines have resulted in mixed reactions, where some believe in the need for AML guidelines, while the rest think they will violate privacy and prevent economic activity.
The crypto industry warns the EU from replicating the regulation by enforcement by US regulators.
Daniel’ Loddi’ Troster, the Sound Money Bitcoin Podcast host, highlighted the practical obstacles and impacts of the current law, expounding on the effect on donations and the broader implications for cryptocurrency utilization within the European Union.
Troster expressed concerns regarding the destructive impacts the guidelines might have. Remarkably, the new regulation does not impact self-custody to self-custody transactions.
