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Highlights
- The UK government has decided not to track investors and enthusiasts holding unhosted wallets that are the recipients of digital asset transfers.
- In contrast, the European Parliament had passed a ruling in March to adopt a measure that would track unhosted wallets and anonymous cryptocurrency transactions.
- The HM treasury hinted that it would like to suggest modifications in the Amendments to the Money Laundering, Terrorist Financing, and Transfer of Funds proposal.
The UK government has decided not to track investors and enthusiasts holding unhosted wallets who are the recipients of digital asset transfers. In March, the
European Parliament had passed a ruling on the need to track transactions that are sent from various unhosted crypto wallets. The parliament members felt that it is critical to ensure that crypto organisations adhere to the Anti-Money Laundering laws and Counter-Terrorism Financing laws to ensure that the unhosted wallets are not being misused by illicit individuals.
In contrast, the HM Treasury said that there is no evidence, which suggested that unhosted wallets can present risks. The HM treasury hinted that it would like to modify the Amendments to the Money Laundering, Terrorist Financing, and Transfer of Funds proposal.
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It further added that several investors hold crypto assets for legitimate purposes and use unhosted wallets largely due to the flexibility of customisation and security.
What did HM Treasury say?
HM Treasury, while it recognises the advantage, it was also quick to point out that illicit parties also need to be monitored to make sure that they don’t take advantage of this leniency.
If approved, the amendment is expected to be revised following the one-year grace period, following its implementation in September 2023.
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The welcome change
The news would come as a sigh of relief for the crypto community who had taken a grim view of the European Parliament’s decision with leading industry leaders terming it as anti-innovation.
A similar proposal was floated in the US in 2020 by its money-laundering watchdog FinCEN. However, it was opposed largely, where experts suggested that if it is implemented, it would put data of investors at risk.
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