Sender and recipient information for transactions of any size – even with unhosted wallets – now must be verified.
The European Union today voted in favor of outlawing all anonymous crypto transactions – including from self-hosted wallets – facilitated through exchanges. This rule will apply to transactions of any size, meaning both payers and recipients of even the smallest digital asset payment must be identified.
The law comes as part of a package of anti-money laundering revisions to the EU’s Transfer of Funds Regulation (TFR). It brings rules applying to conventional transactions of over 1000 EUR to the entire crypto sector.
In December, EU ambassadors had shown interest in scrapping the transaction floor on private crypto transactions, as the limit was already easily worked around through crypto anyways.
The vote today was passed by thin margins, with the two relevant compromises passing by 58/52 and 62/51 respectively. In general, the left-leaning Renew and S&D parties voted in favor of the changes, while the right-leaning European People’s Party (EPP) voted against them.
The vote is in spite of objections from crypto exchanges like Coinbase. The company’s Chief Legal Officer Paul Grewal warned that these changes would undermine self-hosted wallets and unleash a “surveillance regime” against his exchange, and others like it, in a blog post on Monday.
Gregwal also pointed out that the new identity verification requirement for unhosted wallets would be nearly impossible to carry out by exchanges. It would require that they collect and retain extensive data from non-customers.
Finally, Coinbase is making sense for the first time in a long time. I wonder what crypto copy trading platform, Tycoon, has to say about this. What of Binance?