Debunking Claims: EU Does Not Ban Anonymous Crypto Wallets and Transactions
An industry expert, Patrick Hansen, has recently addressed the claims that the European Union (EU) has banned anonymous crypto wallets and transactions. These claims were circulating in the industry after reports spread about the EU’s recent anti-money laundering (AML) law targeting a ban on anonymous crypto accounts. However, Hansen clarified that the law does not specifically target cryptocurrencies but rather applies to all financial institutions. Here are the key points:
The Law Applies to All Financial Institutions
Hansen emphasized that the AML law is not solely a crypto regulation but a broad framework that includes all financial institutions. This encompasses crypto-asset service providers (CASPs) and other services prone to AML risks such as gambling services.
- The AMLR applies to all CASPs regulated under MiCA.
- CASPs must adhere to standard KYC/AML procedures like customer due diligence (CDD).
According to Hansen, this is not new information as all crypto exchanges and custodial wallet providers in the EU already follow these practices.
No Outright Ban on Anonymous Crypto Wallets
Contrary to rumors, the AML law does not impose an outright ban on anonymous crypto wallets. In fact, it includes provisions for them. Hansen explained that custodial wallets cannot provide services to anonymous users, which aligns with existing AML regulations.
“Also, CASPs will not be allowed to provide accounts for privacy coins. This is already existing business practice across the world – not only in the EU.”
Furthermore, the law already prohibits the listing of cryptocurrencies with built-in anonymization functions. Therefore, there is no significant change in this regard.
EU’s AML Law: Limited Impact on Cryptos
Hansen clarified that the EU’s AML law largely reaffirms existing AML rules for CASPs. As a result, it has an “extremely limited” impact on the crypto sector in the EU region. Here are some important points to note:
- The law does not introduce new restrictions on self-custody payments, wallets, or peer-to-peer transfers.
- Therefore, individuals can continue using their self-custody wallets for buying goods and services in the EU without any restrictions.
The final text of the law was agreed upon by the ECON committee in the EU in March. It only needs final approval from the EU Parliament’s plenary and the EU Council.
Hot Take: Debunking EU’s Ban on Anonymous Crypto Wallets
In conclusion, claims suggesting that the EU has banned anonymous crypto wallets and transactions have been debunked by industry expert Patrick Hansen. The recent AML law introduced by the EU does not specifically target cryptocurrencies but applies to all financial institutions. The impact on the crypto sector is minimal, with no new restrictions on self-custody wallets or peer-to-peer transfers. Individuals can continue using their wallets for transactions in the EU without any limitations. It is essential to rely on accurate information rather than rumors circulating in the industry.
Sources: EU’s recent anti-money laundering (AML) law, Patrick Hansen’s Twitter thread
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