No, the European Union does not ban anonymous cryptocurrency wallets

There has been a wave of allegations about an EU-wide ban on anonymous cryptocurrency wallets and transactions I was exposed By industry expert Patrick Hansen. In a long thread on Social Network X, Hansen explained what the EU's Anti-Money Laundering Regulation (AMLR) actually entails for the industry.

Understand AMLR's reach

Contrary to popular belief, the AMLR does not rule out cryptocurrency regulations. Instead, it serves as a broad anti-money laundering and counter-terrorism financing (AML/CFT) framework that applies to a range of institutions that are considered “obligated entities” (OEs).

These entities extend to the financial sectors, including crypto asset service providers (CASPs). It also extends to non-financial institutions exposed to AML/CFT risks (such as sports clubs and gambling services).

Most importantly, the regulation explicitly exempts non-custodial wallet providers from their obligations.

Impact on anonymous transactions

A crucial aspect of the AMLA is its application to CASPs, including exchanges and brokers regulated under the Markets in Cryptoassets (MiCA) framework. These providers are required to adhere to standard KYC/AML procedures, including Customer Due Diligence (CDD).

This means blocking anonymous accounts and services for users of crypto companies. Additionally, CASPs are prohibited from offering accounts for privacy coins, an already common practice in the global cryptocurrency exchange scene due to existing anti-money laundering rules.

Nothing new?

Despite Hansen's criticism of some of the AML provisions, the regulation, he points out, largely reaffirms existing AML/CFT rules for CASPs and OEs.

It did not impose radically new restrictions on self-custodial payments, wallets, or peer-to-peer transfers.

According to Hansen, the regulation has a “very limited” impact on the cryptocurrency sector within the EU.

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Alex Dovbnya