Crypto Industry Fights Back Against EU 'Unhosted Wallet' Propaganda

cryptonews.com:

The global crypto industry is increasingly fighting back in response to regulatory proposals they consider harmful to the sector’s future development. 

Following the unsuccessful campaign by some European Parliament members to ban proof-of-work (PoW) consensus protocol-powered cryptoassets, the crypto industry is now targeting a potential crackdown on so-called "unhosted wallets" in the European Union’s forthcoming Transfer of Funds Regulation (TFR).

An "unhosted wallet" is just a regular crypto wallet where a user is in control of the private keys. 

Paul Grewal, Chief Legal Officer at crypto exchange giant Coinbase, said in a statement, that

“If adopted, this revision would unleash an entire surveillance regime on exchanges like Coinbase, stifle innovation, and undermine the self-hosted wallets that individuals use to securely protect their digital assets." 

Grewal further noted that the vote would likely take place this week and that time is running out.

Coinbase’s head lawyer argued that the new obligations on exchanges to collect, verify and report information on non-customers using their wallets, and requiring them to not only collect personal data about non-customer wallet users, but to also verify the data’s accuracy before processing a transfer to one of their customers -- resembles a situation in which “you cannot take money out of your bank account to send to someone else until you share personal data with your financial institution about that person and verify their identity.”

Art. 5 of the draft requires exchanges to report to the authorities every transfer from a non-customer’s self-hosted wallet of at least EUR 1,000.

“The proposal even leaves the door open to a total ban on transfers to self-hosted wallets even