UK Scraps Plan to Monitor Unhosted Digital Wallets – Decrypt

United Kingdom, quite the opposite A proposal approved by the European Union in MarchSenders of crypto assets will not be required to collect information about recipients using non-hosted wallet addresses.

“Instead of requiring the collection of beneficiary and originator information for all non-hosted wallet transfers, crypto asset businesses will be expected to collect this information only for transactions identified as having a high risk of illicit finance. ,” according to a document Published by Treasury. The decision came after seeking feedback from various respondents, including academia and industry experts.

The news probably meant a sigh of relief for the privacy-focused wing of the crypto community, many of whom spoke out against the EU measure.

At the time, Coinbase CEO Brian Armstrong called it “anti-innovation, anti-privacy and anti-law enforcement,” while also pointing to the burdensome requirements placed on individuals.

According to a Treasury report last week, several UK government advisers seemed to agree with Armstrong. Opponents of the potential reporting requirement mainly argued that the burden of imposing it would be “disproportionately” greater than its effectiveness in combating illegal transactions.

Those in favor of the requirement claimed that transfers between any parties should be as transparent as between crypto asset businesses, considering “unhosted wallet” transactions to be a high risk. However, the government disagreed, saying that there is “no evidence” that non-hosted wallets present disproportionate risk.

“Many individuals who hold crypto assets for lawful purposes use unhosted wallets Because of their adaptability and potential security benefits (like freezing.) wallet storage),” the government added.

An unhosted, or “non-custodial,” wallet is one where an individual user controls their private keys, rather than an exchange or trading platform. This gives users complete control of their own funds, rather than requiring permission from a third party. (Examples include MetaMask and WalletConnect, or hardware wallets such as Ledger and Trezor.)

The Canadian government ran into trouble with unhosted wallets in February, when nearly $1 million in bitcoin was transferred to Freedom Convoy protesters. Despite successfully barring bank accounts and donation platforms like GoFundMe, officials only Seize Some unhosted charity funds.

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