EU Cracks Down on Unverified Self-Custodial Wallet Crypto Transactions

• The resolution was accepted by the majority of the main commission of the Parliament.
• Anonymous crypto transfers above 3,000 euros are subject to the restriction.

Crypto transactions conducted using unverified self-custodial wallets are effectively banned by the European Union (EU), with a transaction limit cap set. To prevent financial crimes, this regulation is part of the larger Anti-Money Laundering (AML) guidelines. On March 19, the resolution was accepted by the majority of the main commission of the European Parliament, indicating a united stance against anonymous transactions.

Mobile, desktop, or browser-based self-custody wallet transactions that do not use appropriate identity are the focus of the rule. The strategy is designed to close the loophole that allows criminals to shift money anonymously. Moreover, anonymous cryptocurrency transfers above 3,000 euros, as well as cash transactions exceeding 10,000 euros, are subject to the restriction.

Invasions of Financial Privacy and Autonomy

The recently approved law will be completely enforced no later than three years after it is formally promulgated. However, the Irish legal firm Dillon Eustace predicts that the regulations will be implemented more quickly, leading to a dramatic shift in the crypto industry. European Union financial activities are more stringent due to the many rules pertaining to cash and anonymous cryptocurrency transactions.

Furthermore, German MEP Patrick Breyer and Alternative for Germany party member Gunnar Beck’s dissenting votes show the level of opposition to the law. Concerned that these invasions of financial privacy and autonomy make it harder to do business anonymously, he has brought them up as a problem. Their stance shows how divided people are on the relative importance of safety and personal freedoms.

Opinions within the crypto community are divided on the need for anti-money-laundering regulations; some see them as necessary, while others worry about potential overreach that would compromise economic freedom and privacy.

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