The EU Parliament voted to impose KYC On private crypto wallets and the rules will essentially prohibit anonymous crypto transactions so let’s read more today in our latest cryptocurrency news.
The EU Parliament voted to crack down on unhosted crypto wallets. The vote today will impose new regulatory measures that will prohibit anonymous transactions and the news was confirmed by the advisor to the Committee on Economic and Monetary Affairs. The LIBE committees and ECON voted to approve the proposal that will require crypto service providers like exchanges to collect identifiable information from individuals that transact more than 1000 EUR using the unhosted crypto wallets. The votes on several amendments were tight but the final draft was approved.
4/ This means before you can send or receive crypto from a self-hosted wallet, Coinbase will be required to collect, store, and verify information on the other party, which is a not our customer, before the transfer is allowed.
— Brian Armstrong – barmstrong.eth (@brian_armstrong) March 30, 2022
In order for the legislation to be adopted officially, it has to go through tripartite meetings between the EU parliament, the European Council, and European Commission but the process is not expected to derail the legislation. The unhosted wallets refer to non-custodial wallets that don’t rely on third parties Examples fo these wallets include WalletConnect, MetaMask, and Trezor.
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The vote came after a debate among policymakers and the crypto industry over whether these wallets should be subject to KYC requirements that will compel companies to provide information about the users. The industry is often against these types of measures because the users of the non-custodial wallet are not exactly customers.
The CEO of Coinbase Brian Armstrong tweeted that the proposal is anti-innovation, anti-law enforcement, and anti-privacy and argued that it holds crypto to a different standard than it does fiat. He said:
“Imagine if the EU required your bank to report you to the authorities every time you paid your rent merely because the transaction was over 1,000 euros.”
Not all parliamentarians were in favor either like Markus Ferber who insinuated that it is equal to a ban on private wallets. The EU parliament member Paul Tang responded that these concerns are overblown:
“In today’s vote we will not be banning anything. Instead we oblige verification to prevent crime and corruption through unhosted wallets.”
As recently reported, The EU proposed another crackdown approach that can crackdown on crypto’s unhosted wallets which are not held by a third-party intermediary that is known as non-custodial. Examples of wallets include MetaMask, Walletconnect, and even Trezor and Ledger. The EU Commission proposed a text that can oblige crypto service providers to obtain the information from the customers.
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