EU Plans to Ban Anonymous Self-Hosted Wallets for Large Encrypted Asset Transfers

According to reports, EU lawmakers are scheduled to ban voting on the transfer of large encrypted assets from anonymous self hosted wallets on March 28th local time. Under the current proposal, traders will be prohibited from making or accepting anonymous cryptocurrency transfers exceeding 1000 euros ($1080). If the customer’s identity can be verified, or if a regulated cryptocurrency provider is involved, the transaction will be allowed. It is understood that the first draft of the law is more stringent, but at an internal meeting on March 22, the terms were relaxed and private transfers of cryptocurrency (such as large payments between two friends) are still allowed. According to Parliament’s plan, EU encryption providers will be prohibited from establishing agency relationships with any foreign suppliers that are not registered or licensed anywhere. These proposals also include the NFT platform within the scope of money laundering rules and decentralized autonomous organizations (DAOs) under the control of specific personnel. These measures require the approval of the European Parliament and the European Council, which represents EU member States.

EU legislators vote on restricting transfers of large self custody encrypted assets

Introduction

Recently, the European Union announced new legislation to regulate the transfer of large encrypted assets using anonymous self-hosted wallets. Under the new proposal, traders will be prohibited from making or accepting anonymous cryptocurrency transfers exceeding 1000 euros ($1080). It is said that this legislation will be effective from March 28th.

The Proposed Plan

The initial draft of the law was more severe, but after an internal meeting on March 22, the terms were relaxed. In the revised draft, private transfers of cryptocurrency such as large payments between two friends are still allowed. Under the new proposal, if the customer’s identity can be verified, or if a regulated cryptocurrency provider is involved, the transaction will be allowed.
According to the plan, EU encryption providers will be prohibited from establishing agency relationships with any foreign suppliers not registered or licensed anywhere. The proposed laws also include the NFT platform within the scope of money laundering rules and decentralized autonomous organizations (DAOs) under the control of specific personnel.

The Impact

The impact of this legislation is expected to be significant. The key objective of this regulation is to prevent money laundering and other illegal activities through the anonymous transfer of cryptocurrency through self-hosted wallets. While the new legislation may make it more difficult for some traders to conduct certain transactions, it is likely to improve the transparency and safety of the cryptocurrency industry.
However, some critics argue that this legislation is too rigid and could create too much red tape for legitimate traders, who may face investment barriers due to stringent regulations of this nature.

Conclusion

In conclusion, the regulation of cryptocurrencies is an evolving subject worldwide, and the legislative changes in the European Union are just the beginning of the new era of cryptocurrency trading. While some may argue that the proposed laws make cryptocurrency trading more burdensome, it is clear that the implementation of such laws is essential for the safety and integrity of both the trader and the industry. As the world of finance continues to move toward a more decentralized, digital future, exchanges, and governments need to work together to create a more transparent, safe, and regulated environment for all involved.

FAQs

Q.1. Will people still be able to use cryptocurrencies?
A. Yes, people will still be able to use cryptocurrencies. However, the new regulations will make it more challenging for traders to conduct certain transactions, and anonymity in cryptocurrency transactions will be significantly curtailed.
Q.2. Is the European Union alone in regulating cryptocurrency?
A. No, many countries all over the world have started regulating the cryptocurrency industry. The trend highlights the growing importance of digital currencies and the need for industry-wide regulations.
Q.3. How will the new law impact global cryptocurrency trading?
A. The implementation of new regulations by the European Union will have a substantial impact, creating transparent and safer cryptocurrency trading globally. The new regulations may, however, create some red tape for legitimate traders who may face investment barriers due to stringent regulations of this nature.