Today, two commitees of the European Parliament approved draft regulations to impose ID requirements on unhosted wallets. The committees backed guidelines that would prohibit transactions that state authorities cannot readily link to a person or organization, striking a blow against the pro-privacy orientation of many crypto users.
EU Parliament requires ID check on unhosted wallets
The European Parliament’s Committees on Economic and Monetary Affairs (ECON) and Civil Liberties (LIBE) approved a bill that would control crime, with 93 in favor to 14 against, as well as 14 abstentions.
European Parliament made a statement regarding the issue:
“Under the new requirements agreed by MEPs, all transfers of crypto-assets will have to include information on the source of the asset and its beneficiary, information that is to be made available to the competent authorities.”
The category of “person-to-person transactions” would not be covered. The crypto business, in particular, is opposed to new regulations limiting individuals’ personal crypto wallets (which are referred to as “self-hosted wallets” by lawyers).
Paul Grewal from Coinbase said in a blog post:
“Among the worst of the proposed provisions are new obligations on exchanges to collect, verify and report information on non-customers using self-hosted wallets.”
Wallets are programs that allow users to manage their own digital belongings without having to trust anybody else with their money. Grewal notes that the regulations would necessitate Coinbase verifying who was sending one of its customers money before allowing them to do so. Traceability is important, according to one of the bill’s supporters.
“As illustrated by all the recent money-laundering scandals, from the Panama Papers to the Pandora Papers, criminals thrive where rules allowing for confidentiality allow for secrecy and anonymity.”
-Ernest Urtasun co-rapporteur for the ECON
After they have been approved, national parliaments will negotiate the final legislative language with their own governments. The bill is anticipated to be voted on by the European Parliament in April. Let’s see if EU Parliament will be able to limit personal crypto wallets, so-called “unhosted wallets.”
Unhosted wallets definition
Unhosted wallets are a software or hardware that allows you to store, manage, and transfer crypto-assets that are not held by a third party, such as a bank or a credit card company.