EU Committees Approve Ban on Anonymous Crypto Transactions via Hosted Wallets
The recent anti-money laundering legislation introduces specific restrictions for cash transactions and anonymous digital currency payments. The majority of the main committees in the European Parliament have approved the ban on digital currency transactions of any value conducted through hosted cryptocurrency wallets, while the Council of Europe and the Parliament temporarily agreed to expand parts of the European Union’s anti-money laundering (AML) rules and counter-terrorism financing to cover the digital currency market, as per a post by Patrick Breyer, a European Parliament member for the Pirate Party Germany. Most of the EU Parliament’s leading committees passed the new AML laws on March 19.
Breyer was one of only two members who voted against the ban on anonymous crypto payments, with Gunnar Beck from Alternative for Germany also voting against. This prohibition specifically applies to cryptocurrency wallets hosted or maintained by third-party service providers, like centralized exchanges. The new AML law imposes specific limitations on cash transactions and anonymous digital currency payments. According to the new rules, anonymous cash payments over 3000 euros in business transactions and cash payments over 10000 euros in business transactions are entirely prohibited. The new law is expected to be fully operational within three years of its enactment, but Dillon Eustace, an Ireland-based law firm, expects it to be fully operational sooner.
Many digital currency networks operate in unlicensed environments and allow anyone to generate a private encryption key, providing unlimited and anonymous access to the system. Breyer explained his opposition to the bill in a press release after its approval by the main committees, stating that the bill endangers economic independence and financial privacy. He views the ability to conduct anonymous transactions as a fundamental right. The crypto community has had mixed reactions to the European Union’s regulatory actions, with some believing the new AML rules are necessary, while others are concerned they violate privacy and restrict economic activity.
Daniel Lodeiro Trustner, host of the Sound Money Bitcoin podcast, emphasized the practical obstacles and consequences of the recent law. He outlined the impact on financial contributions and the broader implications for the use of digital currencies in the European Union, expressing concern over the stifling effect these laws could have.
