The United Kingdom will no more impose forced requirements on the crypto companies to share personal details of users regarding their crypto transactions to unhosted crypto wallets.
Crypto & blockchain adoption is increasing rapidly, thanks to huge numbers of use cases where we can use crypto in payment options as well as for investment purposes. But one other thing that attracts people to use crypto is the decentralized nature of crypto blockchain Networks and also decentralized crypto wallets, which are known as non-hosted or non-custodial wallets. Non-custodial wallets are those wallets, which can be managed 100% by the user personally and all the details of the wallet will remain in totally secured mode, even service providers not remain able to access or see the details.
In the past, it happened many times, where Unhosted crypto wallet-based services and companies faced heat from the government agencies. The UK was one of the haters of unhosted wallets and also proposed laws for all such kinds of wallets. Under the proposed ideology, Crypto companies were required to report all the personal details of the users for their user’s crypto transactions associated with non-hosted wallets.
The UK Treasury acknowledged in its June report that “many persons who hold crypto assets for legitimate purposes use unhosted wallets” and that no “good evidence” shows such wallets being used disproportionately for criminal activity. It will therefore only expect crypto businesses to collect personal information for “transactions identified as posing an elevated risk of illicit finance.”
This decision was taken by the UK Treasury on behalf of the suggestions it received from all dominant regulatory bodies, which include industry leaders, academia, civil society, and government bodies on the subject of updating money-laundering regulations.
Earlier this, the UK Treasury issued an order and stated that all transactions associated with crypto will fall under the Financial Action Task Force (FATF), so under the new rules all the crypto companies were required to report the details of the fund receiver and sender.