No, the EU does not ban anonymous crypto wallets

There are a number of calls to ban anonymous crypto wallets and transactions across the EU. Error exposed By industry expert Patrick Hansen. In a long thread on the X social media network, Mr. Hansen explained what the EU's Anti-Money Laundering Regulation (AMLR) will actually mean for the industry.

Understand the scope of AMLR

Contrary to popular belief, AMLR does not have a special focus on cryptocurrency regulation. Instead, it serves as a broader Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) framework that applies to a variety of entities that are considered “Obliged Entities” (OEs).

These entities span the financial sector, including crypto asset service providers (CASPs). It also applies to non-financial institutions that are susceptible to AML/CFT risks, such as sports clubs and gambling services.

Importantly, this regulation explicitly exempts providers of non-custodial wallets from obligations.

Impact on anonymous transactions

An important aspect of AMLR is that it applies to CASPs, including exchanges and brokers regulated under the Markets in Cryptocurrency (MiCA) framework. These providers must follow standard KYC/AML procedures, including customer due diligence (CDD).

This means a ban on anonymous accounts and services for users of custodial crypto businesses. Additionally, CASPs are prohibited from offering privacy coin accounts, which is already a common practice in the global crypto exchange environment due to existing AML rules.

Nothing new?

Despite Mr. Hansen's criticism of specific AMLR provisions, as he points out, this regulation primarily reaffirms existing AML/CFT rules for CASP and OE.

No fundamentally new restrictions have been introduced for self-custodial payments, wallets, or peer-to-peer transfers.

According to Hansen, the regulation will have a “very limited” impact on the crypto sector within the EU.

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Alex Dovnya