EU Committees Approve Ban on Anonymous Crypto Transactions Via Hosted Wallets – Most of the lead committees in the European Parliament have endorsed a prohibition on cryptocurrency transactions of any amount conducted via hosted crypto wallets.
This decision coincides with the provisional agreement between the European Council and Parliament to broaden aspects of the European Union’s Anti-Money Laundering (AML) and Counter-Terrorist Financing regulations to encompass the cryptocurrency sector.
According to an X post by Patrick Breyer, a member of the European Parliament for the Piratenpartei Deutschland (Pirate Party of Germany), a “majority of the EU Parliament’s lead committees” approved the new AML laws on March 19. Breyer stands among just two members who opposed the prohibition on anonymous cryptocurrency payments.
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The other dissenter was Gunnar Beck of Alternative für Deutschland (Alternative for Germany). This ban targets hosted or custodial cryptocurrency wallets provided by third-party service providers, such as centralized exchanges. The updated AML legislation imposes restrictions on both cash transactions and anonymous cryptocurrency payments.
According to the new regulations, anonymous cash payments exceeding 3,000 euros will be prohibited in commercial transactions, while cash payments exceeding 10,000 euros will be entirely banned in business transactions. The upcoming legislation is anticipated to be fully implemented within three years of its enactment.
Nonetheless, Dillon Eustace, an Ireland-based law firm, anticipates that the legislation will be operational sooner. Numerous cryptocurrency networks operate within permissionless ecosystems, enabling individuals to generate cryptographic private keys and gain unrestricted, anonymous access to the system—a core tenet of cryptocurrencies.
Following the approval of the legislation by the lead committees, Breyer articulated his opposition to the bill in a press release, citing concerns that it compromises economic independence and financial privacy. He emphasized that he views the ability to transact anonymously as a fundamental right. The response from the crypto community regarding the EU’s regulatory measures has been mixed.
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While some believe the new AML laws are necessary, others fear they may encroach upon privacy rights and restrict economic activity. Daniel “Loddi” Tröster, the host of the Sound Money Bitcoin Podcast, highlighted the practical challenges and consequences associated with the recent legislation. He discussed its potential impact on donations and the broader implications for cryptocurrency usage within the EU, expressing apprehensions about the potentially stifling effects of the regulations.
