Anonymous crypto-asset wallets can be prohibited in Europe

The European Commission has today presented an ambitious package of legislative proposals to strengthen the EU’s anti-money laundering and countering terrorism financing (AML/CFT) rules.

At present, only certain categories of crypto-asset service providers are included in the scope of EU AML/CFT rules. The proposed reform will extend these rules to the entire crypto sector, obliging all service providers to conduct due diligence on their customers. Today’s amendments will ensure full traceability of crypto-asset transfers, such as Bitcoin, and will allow for prevention and detection of their possible use for money laundering or terrorism financing. In addition, anonymous crypto asset wallets will be prohibited, fully applying EU AML/CFT rules to the crypto sector.

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It looks similar to banning numbered swiss bank accounts, every account will have to have KYC to be held by the bank, it’s not necessarily banning anonymous cryptocurrencies.

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My comments about this on twitter: https://twitter.com/zooko/status/1417886236841238530

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Not specifically about crypto as the internet in general but this is why section 230 is important (at least in the US). (Lol 230, not 32 sry)

I think people are conflating two different things about this proposal. Neeraj made a important point about the laws intent.

What some think it means:
“Banks will be barred from holding wallets that have anonymous crypto

What it actually means:
“Banks will be barred from allowing anonymous accounts to hold crypto wallets

It’s subtle but important distinction: The laws are telling the VASPs rules regarding it’s KYC of customer accounts not which cryptos the account holds.

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Does someone have experience buying their own crypto license?

Correct me if I am wrong but this would only apply to centralized exchanges and wallets where they would of course be banned or prohibited from allowing any privacy focused coins on their wallet or exchange.

Anyone else using a non-custodial wallet would still be not affected. Even if they banned the apps from the popular Playstore or AppStore, there is always a way around that to be able to install the app and does not stop the user if they already had it installed on their device to begin with.

Next, even if it is prohibited where a user wouldn’t be able to purchase a privacy coin and hold on that exchange, the moment that user sends out their crypto to a non-custodial wallet they could easily convert that into their privacy coin of choice such as ZEC or XMR using wallets like there whether it be Exodus or Edge or any other non-custodial wallet with swaps built in.