The EU Authorities Have Changed Their Mind about Banning Anonymous Crypto Wallets

The EU Authorities Have Changed Their Mind about Banning Anonymous Crypto Wallets

The EU authorities have changed their mind about banning anonymous crypto wallets, The Block reports. Changes to EU anti-money laundering regulations show that anonymous (non-custodial) wallets should not be banned, but they will still be subject to transaction restrictions.

The European Commission proposed to ban the use of anonymous cryptocurrency wallets in the summer of 2021. This was to ensure full traceability of transfers of crypto assets, such as bitcoin, and to prevent and detect the possible use of digital funds for money laundering or terrorist financing.

We are talking about non-custodial wallets (self-hosted, self-custody wallets), passwords from which are stored only by the user himself. In the amendments submitted for discussion to the European Parliament, it is proposed to replace the “non-custodial wallet” with a “non-custodial address”, which clarifies the intentions of politicians to control user accounts, but at the same time not to prohibit non-custodial services.

With this change, the politicians seek to clarify their goal — to prevent the existence of wallets without being linked to an identified account on a crypto service, for example, an exchange, Tommaso Astaci, head of the regulatory affairs department of the Blockchain for Europe lobbying group, told the publication. The previous wording could mean that crypto service providers in the EU would be prohibited from providing any non-custodial services.

Anonymous wallets will still be subject to a transaction limit of €1 thousand if the owner cannot be identified.

However, the transition from the term “wallet” to the term “address” may cause uncertainty in regulation, since other documents still use “wallets” and not “addresses”. Members of the European Parliament have until March 28 to discuss the proposed changes.

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