#Table of Contents

According to reports, EU lawmakers are scheduled to ban voting on the transfer of large encrypted assets from anonymous self hosted wallets on March 28th local time. Under the current proposal, traders will be prohibited from making or accepting anonymous cryptocurrency transfers exceeding 1000 euros ($1080). If the customer’s identity can be verified, or if a regulated cryptocurrency provider is involved, the transaction will be allowed. It is understood that the first draft of the law is more stringent, but at an internal meeting on March 22, the terms were relaxed and private transfers of cryptocurrency (such as large payments between two friends) are still allowed. According to Parliament’s plan, EU encryption providers will be prohibited from establishing agency relationships with any foreign suppliers that are not registered or licensed anywhere. These proposals also include the NFT platform within the scope of money laundering rules and decentralized autonomous organizations (DAOs) under the control of specific personnel. These measures require the approval of the European Parliament and the European Council, which represents EU member States.

EU legislators vote on restricting transfers of large self custody encrypted assets

1. Brief overview of the EU’s proposed law
2. Restrictions on anonymous cryptocurrency transfers
3. Conditions for permitted cryptocurrency transfers
4. Exceptions for private cryptocurrency transfers
5. Prohibition of agency relationships with unregistered foreign suppliers
6. NFT platforms and DAOs under money laundering rules
7. Proposal approval process
8. Potential impact on the cryptocurrency market

EU Lawmakers to Ban Large Encrypted Asset Transfers from Anonymous Wallets

On March 28, EU lawmakers are set to pass a law that prohibits the transfer of large encrypted assets from anonymous self-hosted wallets. This means that traders will be restricted from making or accepting anonymous cryptocurrency transfers exceeding 1000 euros. However, verified customer identities or usage of regulated cryptocurrency providers will allow for transactions.
The initial draft of the encryption law was more stringent, but on March 22, the terms were relaxed. This means that private transfers of cryptocurrency, such as large payments between friends, will still be allowed.
EU legislators also intend to prohibit EU encryption providers from establishing agency relationships with unregistered or unlicensed foreign suppliers. Furthermore, the proposed measures include NFT platforms and DAOs under money laundering rules and designated control personnel.
For these restrictions to become law, approval must be given by both the European Parliament and the European Council, which represents the EU member states.

Restrictions on Anonymous Cryptocurrency Transfers

The proposed law restricts the transfer of large encrypted assets from anonymous self-hosted wallets. Traders will not be allowed to make or accept anonymous cryptocurrency transfers exceeding 1000 euros.
Those who want to participate in cryptocurrency transfers must verify their identity or use a regulated cryptocurrency provider. It is highly recommended that EU encryption providers and their partners comply with the new regulations.
The proposed measures aim to prevent illegal activities such as money laundering and fraud, which can be easier to carry out with anonymous cryptocurrency transfers.

Conditions for Permitted Cryptocurrency Transfers

According to the proposed law, cryptocurrency transfers are acceptable if they comply with the following conditions:
1. Transactions must have verifiable customer identities
2. Transactions must involve a regulated cryptocurrency provider
3. Transactions must comply with money laundering and terrorist financing regulations
In addition to the above, any other conditions will likely develop as this law is put into practice. Verification of identity will most likely involve tighter compliance with Identity Verification (IDV) systems that comply with Know Your Customer (KYC) and Anti-Money Laundering (AML) protocols.

Exceptions for Private Cryptocurrency Transfers

Despite the restriction on anonymous self-hosted wallet transfers, private cryptocurrency transfers are still allowed under the proposed law. This means that large cryptocurrency payments between friends will still be permitted.
However, to safeguard against potential illegal activities within private transfers, it may be necessary to make some ground rules, such as establishing protocols for reporting and investigating any suspicious activity that may arise.

Prohibition of Agency Relationships with Unregistered Foreign Suppliers

Under the proposed encryption law, EU encryption providers will be prohibited from establishing agency relationships with unregistered foreign suppliers.
Registration or licensing must be obtained from a legally recognized authority to form these partnerships. A lack of registration or licensing may prompt the termination of established relationships.
The rule aims to identify any irregular transactions that may stem from agent relationships, which may involve companies with a history of criminal activity.

NFT Platforms and DAOs under Money Laundering Rules

The proposed law also includes NFT platforms and DAOs under the scope of money laundering rules. The proposed law proposes designated personnel responsible for the control of DAOs.
The action aims to combat illegal activities associated with these platforms and to promote trust among consumers of the rising cryptocurrency market.

Proposal Approval Process

The proposed EU encryption law must first pass through the European Parliament and the European Council, representing EU member states, for approval.
Critical discussions and negotiations will occur in this process, with potential modifications to the proposed law.

Potential Impact on the Cryptocurrency Market

This proposed law has the potential to impact the cryptocurrency market. In particular, the restriction of anonymous transfers may prompt users to seek alternative platforms or cryptocurrencies that do not have these restrictions.
The increased regulation on encryption providers ensures that companies meet the new standards of compliance, which encourages a more professional market.
Overall, the proposal aims to expedite the maturation of the cryptocurrency industry in the EU, and reduce the risks associated with illegal activities.

FAQs

1. What is the proposed change in EU encryption law?

The proposed change in EU encryption laws seeks to restrict the transfer of large encrypted assets from anonymous self-hosted wallets.

2. What are the conditions for permitted cryptocurrency transfers?

The proposed regulation stipulates three conditions for permitted cryptocurrency transfers: verifiable customer identity, a regulated cryptocurrency provider, and compliance with anti-money laundering and terrorist financing regulations.

3. How does the proposal affect private cryptocurrency transfers?

Private cryptocurrency transfers are still allowed, but it is important to remain vigilant in detecting potential illegal activity that may occur.