EU proposed another crackdown on non-custodial crypto wallets so the companies that interact with them will be expected to collect personal details about the owners as we are reading furhter in our latest cryptocurrency news today.
The EU proposed another crackdown approach that can crack down 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.
“In the case of a transfer of crypto-assets from or to a crypto-asset wallet not held by a third party, known as an ‘unhosted wallet,’ the crypto-asset service provider or other obliged entity should obtain and retain the required originator and beneficiary information from their customer, whether originator or beneficiary.”
The EU Parliament votes on Thursday, March 31 on modifying the Transfer of Funds Regulation. Their latest draft could significantly violate individual financial freedom, irreparably harm the cryptoeconomy, & stifle the future of innovation across the EU.
— Faryar Shirzad (@faryarshirzad) March 27, 2022
If the service provider says the information provided is inaccurate or suspicious, it will assess on a risk-sensitive bias and whether to reject or suspend the transaction and whether to report the transaction to the relevant financial intelligence unit. The industry responded in force after the proposal and Coinbase’s chief policy officer Faryar Shirzad even said that the latest draft can violate individual financial freedom and can harm the crypto economy and stifle the future of innovation across the EU. The former policy analyst at the Dutch Central Bank Simon Lelieveldt will focus on crypto regulations and had a harsh word for the proposal as well:
“If you want to kill privacy, this is the best way to do it. No way this will stand up over time, but in 15 years’ time a lot of damage can be done still.”
The European Parliament will vote on the proposal by March 31, 2022. The proposal came shortly after a key European vote on PoW blockchain tech earlier this month. The EU lawmakers agreed to drop the mentions of the PoW mining ban from the Markets in Crypto Assets legislative package which is a new set of regulations aimed at consolidating the EU’s approach to crypto. The EU Parliament Committee on the Economic and Monetary Affairs rejected other versions of this package which contained what was seen as a de facto ban on PoW mining and used by Bitcoin and Ethereum.
The text included a section that called for the blockchains to meet a minimum environmental sustainability standard which included the back of the well-documented impact Pow Blockchains has on the environment:
“We think it’s not a good thing. We hoped to have something in the legislation that would at least open the debate and our discussion on some measures that could address the environmental impact of crypto assets.”