On Sunday, an expert in the industry has refuted assertions suggesting that the European Union has prohibited anonymous cryptocurrency wallets and transactions.
Reports circulated within the industry on Saturday, asserting that the EU’s recent anti-money laundering (AML) legislation was aimed at outlawing anonymous cryptocurrency accounts.
However, industry authority Patrick Hansen intervened to address these claims, emphasizing that the legislation does not singularly focus on cryptocurrencies.
“Yesterday provided a clear illustration of why one should exercise caution in relying on crypto Twitter (and frequently crypto-centric media) for insights into cryptocurrency policies,” he articulated on his Twitter handle.
“Let’s dispel the notion that the EU is implementing a ban on anonymous cryptocurrency transactions or self-custodial wallets,” emphasized Hansen. He clarified that the legislation “is not solely aimed at regulating cryptocurrencies,” but rather represents a comprehensive framework applicable to all financial entities. This encompasses Crypto-Asset Service Providers (CASPs) and other services susceptible to anti-money laundering (AML) risks, such as gambling services.
Hansen elaborated, stating, “The Anti-Money Laundering Regulation (AMLR) will encompass all CASPs (exchanges, brokers, etc.) regulated under the Markets in Crypto Assets (MiCA).” These CASPs will be required to adhere to standard Know Your Customer/Anti-Money Laundering (KYC/AML) protocols, including customer due diligence (CDD).
Contrary to circulating rumors suggesting a blanket prohibition on anonymous crypto wallets, the AML regulation actually includes provisions for them. According to Hansen, this provision aligns with existing AML regulations where custodial wallets are barred from catering to anonymous users.
“CASPs will also be prohibited from offering accounts for privacy coins,” Hansen noted. He highlighted that this practice is already commonplace worldwide, not exclusive to the EU.
Moreover, the Markets in Crypto Assets (MiCA) regulation already prohibits the listing of cryptocurrencies with built-in anonymization features. “Thus, this isn’t introducing anything novel,” he emphasized.
EU’s AML Law Has Nothing New for Cryptos?
Hansen emphasized that the regulation primarily reaffirms the existing anti-money laundering (AML) rules for Crypto-Asset Service Providers (CASPs). He highlighted that the legislation has an “extremely limited” impact on the cryptocurrency sector within the EU region.
Additionally, Hansen pointed out that the law hasn’t introduced any significantly new restrictions concerning self-custody payments, wallets, or peer-to-peer transfers.
“As a result, individuals will still be able to utilize their self-custody wallets for purchasing goods/services in the EU without encountering any limitations.”
The final draft of the legislation was agreed upon by the ECON committee in the EU in March. It only awaits final approval in the EU Parliament’s plenary session and the EU Council.
