The EU will not ban wallets (self-hosted wallets), contrary to initial concerns raised by numerous inaccurate statements.
Relaxed Measures and Misunderstandings
Contrary to apprehensions, lawmakers have dismissed the harshest measures previously considered against self-hosted wallets.
Therefore, technology services without financial controls, such as MetaMask, Rabby, or Phantom, will not be subject to this regulation. Indeed, the regulation clearly differentiates between crypto transfers and cash payments without constituting a ban.
Specific Provisions for Crypto Services
The new anti-money laundering rules apply to a variety of financial businesses, including crypto asset service providers (CASP), while peer-to-peer transactions are not affected.
For crypto transfers under 1,000 euros to a wallet, CASPs are required to perform basic customer due diligence (KYC) measures. For transactions above this amount, customer due diligence measures apply.
Self-Hosted Wallets and Other Wallets
Regarding wallets, the bill states that CASPs must implement measures to mitigate risks. This includes identifying and verifying users’ identities, monitoring transactions, and requesting additional information about senders and recipients.
Once again, the bill specifies that it does not apply to companies providing hardware or software as long as they do not control the wallet. This exempts self-hosted wallets like MetaMask, Phantom…
The EU will ban anonymous accounts at CASPs, as well as cryptocurrencies that enhance anonymity, such as Monero and Zcash. Crypto-mixing services, which obscure transaction history, will also be banned for CASPs.
