Legal regulation

The European Commission clarifies that crypto wallets that are not in safe custody do not fall under the proposed ban

On Tuesday, in addition to the ban on anonymous crypto transactions, the EU executive also added anonymous crypto asset wallets to its prohibited list, which require full application of the AML / CFT rules in order to ensure full traceability.

This led to some confusion as to what exactly the crypto wallets mean here, which have been confirmed by the European Commission that they are not applicable to non-custody privacy wallets, but only to exchanges.

“In fact, open source wallets without custody do not fall under the ban,” an EC spokesman told Cryptonews.com.

Anti-money laundering (AML) frameworks are only applied to actors who are gatekeepers of the financial system, which in crypto means VASPs like exchanges that offer virtual wealth services.

“However, this requirement does not apply to non-hosted wallets that are retained by the users themselves,” added the spokesman.

This week, European Union (EU) policymakers proposed tightening regulations for the cryptocurrency sector by banning the anonymous transfer of crypto assets and requiring companies to collect data on both senders and recipients as part of their comprehensive Anti-Money Laundering and Terrorist Financing Plans collect.

“The present proposal aims to introduce these new requirements of the VASPs into EU law by obliging these actors to collect and make accessible data on the authors and beneficiaries of the transfers of virtual or crypto-active assets they operate”, says it in the proposal.

The law, as we reported, basically extends the Financial Action Task Force’s “travel rule” that applies to remittances to the entire crypto industry.

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AnTy has been working full-time in the crypto sector for over two years. Before starting out on blockchain, she worked with the NGO Doctor Without Borders as a fundraiser and has since researched, read and created for various industry segments.