The European Union Is Considering Banning Unidentified Cryptocurrency Wallets

As stated in a recent tweet from Patrick Hansen, Director of Strategy and Growth at Unstoppable Finance, a decentralized finance firm, the EP (European Parliament) will soon take a vote to add unhosted wallets like Metamask or Ledger in the AML (Anti-money laundering) package. This addition is part of its regulation termed TFR (Transfer of Fund Regulations).

Possible Ban Of Anonymity 

Hansen believes the EC (European Commission) may eventually outlaw transfers to private wallet accounts completely.

Businesses are expected to verify any transaction above 1,000 euros ($1,088) under the current travel guideline by the Financial Action Task Force. However, the proposal has no lower limit, implying that all crypto payments would be subject to mandatory identification verification.

The idea to clamp down on unknown transactions has garnered widespread support among legislators, which implies that the remaining opposition from right-wing individuals will not be adequate to stop the harsh measure from being passed into law.

Those Behind The Proposal 

Ernest Urtasun, an ecosocialist politician from Spain and Assita Kanko, an advocate for human rights representing the New Flemish Aliance, are leading the charge to remove the anonymity on all digital currency transactions.

On the 29th of March, the EAC (Economic Affairs Committee) of the EU will vote on whether to de-anonymize crypto payments to unhosted wallets. If the petition is approved, it will next be subjected to discussion in the “trilogue.” According to U.Today, the Committee of the European Union in charge of cryptocurrency barely avoided a de facto BTC ban earlier this month. The last proposal to prohibit the usage of proof-of-work protocol was defeated due to overwhelming opposition from the crypto ecosystem.

In July 2021 European Commission proposed banning anonymous crypto wallets to make fraudulent transactions simpler to detect.

The Report From July

Last year, the proposed bill sought to compel crypto exchange firms to gather information on persons who send and receive virtual currencies, including the user’s name, age, address, and the receiver’s information. This bill was an endeavour on the side of the EC to combat terrorist funding and financial crimes.

The plan argued that if the anonymity of digital currencies is removed, it will restrict the capacity of criminals to abuse crypto transactions for fraudulent practices.

According to the agency’s announcement, the latest proposed regulation will comprehensively help to track BTC and other digital currencies. The announcement stated that

“The revisions announced today will provide complete traceability of virtual currency transactions, such as BTC, and enable the detection and avoidance of their probable use for financial fraud or terrorist funding.”

Latest Reports

The crypto community awaits the verdict of the vote, which will take place on the 29th of this month. If the latest proposal is approved, a greater majority of cryptocurrency firms will refuse to transmit crypto to cryptocurrency accounts that are self-hosted. One merit of cryptocurrency is anonymity, but that feature is about to be removed. Will this affect the usage of cryptocurrencies? Only time will tell.

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