The EU Policy Head at Circle Drops an AMLR FUD: Why 2027 is no crypto cliff-edge.
Keep up with the timeline of the EU regarding the AMLR, as Patrick Hansen of Circle demystifies the issue of a possible ban on self-custody wallets by 2027 and what it would really entail to the crypto sector.
You will not need to be in the crypto industry longer than a day to be familiar with the truth of FUD, or Fear, Uncertainty and Doubt, spreading like a meme coin snowjam. The latest target? The new sprawling Anti-Money Laundering Regulations (AMLR) of the European Union and its effect on the digital asset industry.
The latest news made panics, as the regulations might prohibit self-custody wallets or even secure the death of crypto in EU by 2027. However, there is one major industry insider who says that this is a basic misinterpretation of the law.
Patrick Hansen, the Director of EU Strategy and Policy at Circle (issuer of USDC) has gone to social media to dispel the myths, providing a rational and professional clarification of what the AMLR actually is, and, most importantly, what it is not.
The Amount of the FUD: An Excursion into the AMLR.
First, some context. The AMLR is the new comprehensive EU package of fighting money laundering and financing of terrorists. It has an expansive net that encompasses banks and football clubs, luxury goods traders. More importantly, it encompasses all the so-called Crypto-Asset Service Providers (CASPs), who are already controlled in accordance with the historic Markets in Crypto-Assets (MiCA) framework.
This is because of the fear of stringent new due diligence and verification policies of CASPs whenever dealing with its clients. But the facts come to an end and the FUD comes in with the narrative that this law directly targets or bans self-custody wallets.
Hansen Reality Check: The top myths busted.
Hansen has systematically provided a series of posts to unravel the most popular misconceptions.
Myth 1: The AMLR Prohibits Self- custody wallets.
Reality: Hansen stated categorically that the AMLR does not contain the ban on self-custody wallets/payments. The rules are aimed precisely at the controlled parties the CASPs. Customer verification (Know Your Customer or KYC) is the responsibilities of the service providers but not those holding their own personal keys. Your wallet that is not custodial is your business.
Myth 2: It is a New, Unexplained Threat to Crypto.
Reality: As Hansen notes, the substantive provisions that govern CASPs are mostly an expansion and harmonisation of the existing rules within the 5 th Anti-Money Laundering Directive that is already in place in the EU (the 5th AMLD). These rules are strengthened and harmonized by the AMLR in all member states, which gives it greater legal clarity, rather than less.
Myth 3: 2027 is a "Ban Hammer" Date.
Reality: The present report will evaluate the possibility of future laws that are dedicated to the dangers of self-hosted wallets.
This is a fact-finding mission as Hansen explains and it does not have a date as a regulatory implementation date, but 2027. It does not create any new law. It merely initiates an investigation to research the problem, which, in turn, may result in years later, a separate legislative initiative that, in turn, would be the target of the comprehensive democratic procedure of the EU.
What the AMLR Really Means to CASPs.
Well, then, since it is not prohibiting wallets, what is the AMLR doing? It puts a lot of strain on the screws of regulated crypto businesses.
CASPs will have increased due diligence requirements and the requirement to check on the identity of their customers in transactions that are above EUR1000. They will also need to divulge information to other CASPs and traditional financial institutions with greater freedom to form a more united financial network of intelligence. Concisely, the entry-level and exit-levels of the crypto economy are getting increasingly integrated into the conventional financial surveillance system.
The Bigger Picture: Regulation is a Process, Not an Event.
The explanations provided by Hansen point to an important dynamic in contemporary crypto regulation the distinction between instantaneous regulation and, more long-term, the legislative process.
The EU is constructing a multilayered regulatory framework of digital assets brick by brick. MiCA established the basis of integrity in the market and consumer protection. Financial surveillance is the layer that the AMLR provides. The European 2027 report is merely the EU getting its homework done to determine whether, and what, the next brick will be.
To the industry, it is simple, be constructive. It is time to form that 2027 report and any other legislation to come based on dialogue and evidence-based contributions and not on panic-based FUD.
The End: Sanity not Strife.
The intervention of Patrick Hansen is needed to bring some much-needed clarity. The AMLR of the EU is an important document that represents more compliance costs on crypto enterprises, yet it does not mean the cessation of self-custody and self-owned crypto in Europe.
The way out is knowing the actual regulations, gearing down towards increased compliance, and engaging in the current regulatory dialogue. As it is typical of FUD, the truth is much more complex- and less doomsday-like- than it is presented in the headlines.
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