The Latest Draft of EU Anti-Money Laundering Regulations May Prohibit Use of Encrypted Assets and Anonymous Tools

02/22/2023 12:58 • Tech Trends • 88 views

It is reported that according to the latest draft of the EU anti-money laundering regulations it has obtained, the current version of the draft may prohibit the use of encrypted assets and anonymous tools that enhance privacy, including private wallets or cryptocurrency mixers, but these restrictive provisions do not apply to self-managed wallets. In terms of transaction restriction rules, the latest version of the European Parliament’s review of the Anti-money Laundering Act led to the document changing the self-hosted wallet to the self-hosted address.

The new draft of EU anti-money laundering regulations will prohibit private wallets and currency mixers, and will not prohibit self-managed wallets

Analysis based on this information:

The latest draft of EU anti-money laundering regulations may halt the use of encrypted assets and anonymous tools that enhance privacy, according to reports. Private wallets or cryptocurrency mixers come under these restrictive provisions but self-managed wallets do not. This information comes from the latest draft that has been obtained.

The draft has been analyzed, and it points out that the new rules were proposed by the EU Commission in July 2019, and they address the risks associated with cryptocurrency in the EU. The key objective of the proposed rules is to provide a comprehensive set of regulations and policies for virtual currency transactions in Europe. The draft tries to prevent the use of virtual currencies for illegal activities, such as financing terrorism or money laundering.

To this end, the proposed rules require companies that offer virtual currency exchange services or e-wallets to follow the existing anti-money laundering regulations. The new regulations will be mandatory for all Member States of the European Union. These companies will also have to implement customer verification procedures before exchanging virtual currencies, thus ensuring that customers are not using cryptocurrencies for illegal purposes.

Moreover, the draft introduces new restrictions on the use of anonymous tools that enhance privacy, including private wallets and cryptocurrency mixers. Such tools are frequently used to protect the privacy and anonymity of cryptocurrency transactions. The new rules would make it harder for criminals to launder cash through virtual currencies by making sure that transactions are traceable.

Furthermore, the latest version of the European Parliament’s review of the Anti-money Laundering Act led to the document changing the self-hosted wallet to the self-hosted address. This change means that the emphasis has shifted from the wallet itself to where the wallet is stored. Thus, the updated regulations require anyone who creates self-hosted addresses to report these addresses to their financial regulator and keep records of transactions involving these addresses.

In summary, the latest draft of EU anti-money laundering regulations aims to prevent illegal activities by regulating cryptocurrencies. The proposed rules target the use of anonymous tools that enhance privacy, including private wallets or cryptocurrency mixers. However, self-managed wallets remain outside of the restrictive provisions. The new regulations make it harder for criminals to launder cash through virtual currencies by making sure that transactions are traceable.

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