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The EU wants to ban anonymous crypto wallets

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The European Commission (EC), which is the executive branch of the European Union (EU), yesterday confirmed a new proposal calling for stricter regulation of anonymous crypto wallets and cryptocurrency transactions.

At the beginning of July, reports leaked that indicated that the EC should proceed with tougher interventions. Yesterday’s announcement confirms this.

 

The EU wants to ban anonymous crypto wallets

According to the notification, the EC proposed to impose on companies that allow transfers of BTC (BTC) and other cryptocurrencies an obligation to collect various personal data of senders and recipients. In theory, this should help law enforcement in the fight against money laundering.

“Today’s changes will ensure full traceability of transfers of cryptocurrencies such as BTC and will allow the prevention and detection of their possible use for money laundering or terrorist financing,” the Commission said in a press release. “In addition, anonymous crypto wallets will be banned, and the cryptocurrency sector will be fully subject to EU anti-money laundering and anti-terrorist financing rules.”

This was subsequently confirmed on Twitter by Mairead McGuinness, Commissioner for Financial Services, Financial Stability and Capital Markets Union.

In principle, the Commission has proposed to extend the so-called “travel rule” to cryptocurrency transactions in order to make them more traceable. The rule itself is already used for bank transfers in the EU and is part of the recommendations of the Financial Working Group (FATF)

According to the Commission’s proposal, companies processing crypto transactions will need to record the names of their customers, addresses, dates of birth, account numbers and payee names, as well as allow for the immediate sharing of transaction-specific identifiers. Clients will be categorized according to the level of risk. Each customer will be assigned a risk profile. Transactions will be tracked based on this profile.

Naturally, crypto enthusiasts will not be able to use their anonymous crypto addresses for such transfers. Anonymous bank accounts are already banned in the EU to help curb money laundering.

“These proposals have been designed to strike the right balance between addressing these threats and complying with international standards, without creating an excessive regulatory burden on the industry,” the report said.

“On the contrary, these proposals will help the development of the cryptocurrency industry in the EU, as it will benefit from an updated and harmonized legal framework across the EU,” the Commission concluded.

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