In a new reportthe Open Dialogue Foundation (ODF) provides an overview and analysis of upcoming regulatory proposals around non-custodial Bitcoin and crypto wallets in the European Union (EU).
Some of the recommendations – many of them are fixed FATF tips – will negatively affect users' ability to trade crypto assets privately.
EU & FATF 2025: New Rules for Bitcoin Wallet?
What is the best Christmas gift from human rights, privacy and Bitcoin advocates?@ODFoundation giving you a comprehensive answer to what you should know while using #Bitcoin p2p wallet, privacy payment tools &… pic.twitter.com/YZIlCZjSiR
— Lyudmyla Kozlovska 🇪🇺🇺🇦 (@LyudaKozlovska) December 24, 2024
Important takeaways from the report include:
- According to guidelines from the European Banking Authority (EBA), the current regulatory framework around crypto-assets in the EU allows actions that may pose a significant risk, including immediate withdrawal to non-custodial wallets and the use of anonymous enhancement tools such as mixers.
- The upcoming Markets in Crypto-Assets Regulation (MiCA) may influence Crypto-Asset Service Providers (CASPs) to adopt more stringent AML/KYC practices.
- EU regulation may prevent CASPs from enabling anonymous transactions, which would reduce both the privacy of crypto-asset users and increase operating costs for CASPs.
- The obligations that may be imposed on CASPs will be against the increase in the proliferation of open source technologies such as the Lightning Network, Fedimint and ecash, which allow users to transfer privately and in a way that is against censorship.
Am I sharing all this because I'm trying to ruin your vacation? No, sirs and ma'ams.
I share it because we should be grateful for the work that the Open Dialogue Foundation is doing in shedding light on what is happening within the EU regulatory landscape (to particularly as it relates to non-responsible crypto wallets) and in developing relationships with elected officials in the EU to educate them about the importance of Bitcoin and other freedom technologies.
So, if you want to make a tax-deductible donation to a nonprofit before the year is up, consider provide to the ODF.
And if you're thinking either “Well, I don't live in the EU, so this doesn't affect me” or “I live in the EU, but I'll just move if it goes beyond bad management,” I. 'd ask you to consider the following two points, (the first of which I took directly from this recent ODF report):
- The European Union plays a key role in shaping global financial regulatory standards (which means crypto trading privacy advocates around the world have something at stake here).
- The body that is making many of the recommendations for the new regulatory framework in the EU – the FATF – is an international body, and it will use any wins it gets in the EU to influence to rule in other jurisdictions.
But, again, fear not; be thankful
Donate to the ODF to support its efforts, or do what you can to amplify the organization's messages.
This article is a Take. The views expressed are entirely those of the author and do not necessarily reflect the views of BTC Inc or Bitcoin Magazine.
