EU Bans Anonymous Crypto Transactions: Self-Custody Wallets Affected

The European Union (EU) has recently implemented new regulations to combat money laundering, which includes a ban on cryptocurrency transactions made through unidentified self-custody wallets. This decision was endorsed by the majority of the EU Parliament’s lead commission, except for two members who opposed it. The ban specifically targets unregistered wallets offered by service providers, such as mobile, desktop, or browser applications.

In addition to the prohibition on cryptocurrency payments, the Anti-Money Laundering legislation also outlaws certain limits for cash transactions and anonymous cryptocurrency payments. Any cash transactions exceeding €10,000 and anonymous cash payments over €3,000 will be considered illegal. These laws are expected to be fully implemented within three years, although some believe it may happen sooner.

The new regulations have received criticism from experts and advocates of freedom, who view it as a restriction on financial freedom and fundamental human rights. German MEP Patrick Breyer, one of the two Parliament members who opposed the ban, argues that it compromises economic independence and financial privacy, as he believes the ability to transact anonymously is a fundamental right.

The cryptocurrency sector, known for its emphasis on privacy and decentralization, has responded negatively to these regulatory measures. Some individuals believe that the new laws are necessary for combating money laundering, while others fear that they may infringe on privacy and restrict economic activity.

Daniel “Loddi” Tröster, the host of the Sound Money Bitcoin Podcast, has expressed concerns about the practical implications of these regulations. He specifically highlighted the impact on donations and the potential stifling effect it may have on cryptocurrency use within the EU. It should be noted that the new law does not affect self-custody to self-custody transactions.

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