The EU Parliament Is Cracking Down on Unhosted Wallets. Unwanted News for Crypto Companies

According to Patrick Hansen, head of growth and strategy at decentralized finance startup Unstoppable Finance, the EU Parliament is on track to vote to include unhosted wallets like Ledger or Metamask in the anti-money laundering (AML) package as part of the Transfer of Funds Regulation (TFR). The European Commission may end up completely prohibiting transactions to private wallets.

According to the current Financial Action Task Force (FATF) travel rule, businesses must verify all transactions that exceed 1,000 euros ($1,098). The draft, however, does not include a lower limit, implying that all cryptocurrency transactions will be accompanied by mandatory identity checks.

The move to crack down on anonymous transactions has widespread support among lawmakers, which means that a few dissenting right-wing voices will not be enough to prevent the restrictive proposal from becoming law.

On March 29, the Economic Affairs Committee will vote on de-anonymizing all cryptocurrency transactions to self-hosted wallets. If the proposal is approved, it will be debated by the “trilogue.” The European cryptocurrency community recently narrowly avoided a de facto Bitcoin ban. After a strong backlash from the cryptocurrency community, a last-minute amendment to limit the use of proof-of-work failed to gain enough votes. If the most recent draft does get greenlit, the vast majority of crypto companies won’t be willing to send crypto to self-hosted crypto wallets.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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