July 25, 2021

Can the EU ban anonymous crypto wallets?

Can the EU ban anonymous crypto wallets?

On July 20, the European Commission proposed a draft amendment to EU legislation, according to which the use of anonymous cryptocurrency wallets will beis prohibited, and companies processing cryptocurrency transactions will have to track the personal data of senders and recipients of digital coins, including name, residential address, date of birth and account number.

The new rules were developed as part of the fight against money laundering and the financing of terrorism, writes RBC Crypto.

Unrealistic task

First of all, the innovations will affect legal entities: crypto-exchanges, exchangers, management companies and custodian providers, said leading analyst at 8848 Invest Viktor Pershikov.

If the owner of the cryptocurrency enters into relations with these organizations, then he will also have to disclose data on the ownership of digital coins in his wallet.

"Deanonymization of private cryptocurrency transfersbetween users looks like an unrealistic task only if they do not leave the so-called. "Bread crumbs" by which a wallet can be identified and tied to a person "- explained Pershikov.

It must be borne in mind that the overwhelmingmost users use "hot" wallets, and it is highly likely that these projects operating in the EU will ask the user for more information at the KYC stage in order to identify the fact of ultimate ownership of assets on the wallet, added a leading analyst at 8848 Invest.

It is physically impossible to prohibit the use of "cold" wallets and "Open Source" applications to manage them, noted Nikita Zuborev, senior analyst at BestChange.ru. If both parties to the transaction use anonymous software, it is not possible to determine whether they are EU citizens.

Impact on the industry

If the law banning anonymous crypto walletswill be adopted in the European Union, then crypto companies will be forced to abandon the listing of anonymous coins, says Mikhail Karkhalev, financial analyst at Currency.com crypto exchange. According to him, the trading volumes in such coins are already low, so the law will only affect “gray” and “black” companies, which are not so numerous in the EU.

Fully anonymous coins includeMonero, Zcash, Dash and other tokens, which are built in such a way that transactions using them cannot be tracked and tied to a specific user.

"The ban on the use of anonymous coins was only a matter of time, and, in part, the crypto community understood this and was ready for this.", - added Karkhalev.

The over-the-counter segment may suffer, inin a particular case - p2p-platforms and exchange offices, which are distinguished by their simplicity and speed with the relative anonymity of transactions, Zuborev predicted. According to him, with the introduction of new rules, it will be necessary to improve the technical part and legal regulations, this will ultimately lead to an increase in the cost of services in the over-the-counter market.

Where is it more profitable to buy bitcoin? TOP-5 exchanges

For a safe and convenient purchase of cryptocurrencies with a minimum commission, we have prepared a rating of the most reliable and popular cryptocurrency exchanges that support deposit and withdrawal of funds in rubles, hryvnias, dollars and euros.

Site reliability is primarily determined bytrading volume and number of users. By all key metrics, Binance is the largest cryptocurrency exchange in the world. Binance is also the most popular cryptocurrency exchange in Russia and the CIS, since it has the largest turnover of funds and supports transfers in rubles from bank cards Visa / MasterCard and payment systems QIWI, Advcash, Payeer.

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Rating of cryptocurrency exchanges:

# Exchange: Website: Rating:
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2 Bybit https://bybit.com 7.5
3 OKEx https://okex.com 7.1
4 Exmo https://exmo.me 6.9
5 Huobi https://huobi.com 6.5

The criteria by which the rating is set in our rating of crypto-exchanges:

  • Work reliability - stability of access to all platform functions, including uninterrupted trading, deposit and withdrawal of funds, as well as the period of work on the market and the daily trading volume.
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  • Platform features - availability of additional features - futures, options, staking, etc.
  • final grade - the average number of points for all indicators, determines the place in the rating.

Can the EU ban anonymous crypto wallets?

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