TLDR
- Patrick Hansen, Circle’s EU Policy Chief, clarifies that AMLR 2027 will not ban self-custody wallets or peer-to-peer transactions.
- The AMLR regulation targets crypto-asset service providers, not individuals using self-custody solutions.
- Hansen emphasizes that exchanges and custodial wallet providers will face new compliance requirements under AMLR.
- The regulation will impose a €10,000 limit on physical cash payments, but member states may adopt stricter thresholds.
- Circle credits advocacy efforts for removing harsh provisions from the initial drafts of the AMLR.
Circle’s EU Policy Chief, Patrick Hansen, has dismissed claims that Europe’s new Anti-Money Laundering Regulation (AMLR) will ban self-custody wallets or peer-to-peer transactions. Hansen took to X (formerly Twitter) to address misinformation circulating about the upcoming regulation. He emphasized that these claims were inaccurate and urged the public to focus on facts ahead of the AMLR’s implementation in 2027.
No Ban on Self-Custody or Peer-to-Peer Transactions
Hansen clarified that the AMLR targets crypto-asset service providers (CASPs) such as exchanges and custodial wallets, not individuals. “The regulation does not affect self-custody or private wallets,” he stated. He also stressed that peer-to-peer (P2P) transactions would remain unaffected by the AMLR.
The confusion arose after several prominent crypto accounts falsely claimed that the regulation would restrict or ban self-custody. Hansen explained that, contrary to these claims, the AMLR focuses on intermediaries rather than individuals managing their own assets. This clarification aims to quell any fear among crypto users regarding the impact of the regulation on their personal holdings.
AMLR Will Apply to Service Providers, Not Individuals
According to Hansen, the regulation’s provisions apply solely to service providers, including exchanges, brokers, and custodial wallet providers. Companies like Ledger and MetaMask, which offer hardware or software wallets, will not be subject to AMLR’s compliance requirements. This means users can continue to use self-custody solutions without concern.
Hansen pointed out that exchanges and other CASPs will still need to comply with existing anti-money laundering rules, such as those under the Fifth Anti-Money Laundering Directive (AMLD5). The AMLR will reinforce these existing obligations, ensuring better oversight of crypto service providers while leaving self-custody untouched.
The AMLR will impose limits on physical cash payments across the EU, capping them at €10,000. However, individual member states can adopt stricter thresholds if they choose. This part of the regulation aims to combat money laundering and terrorist financing by reducing the use of cash in transactions.
Despite concerns that the regulation could impose harsher restrictions, Hansen clarified that the final AMLR text does not include many of the initially proposed measures. Early drafts had considered imposing a €1,000 limit on self-custody transactions and extending AML obligations to decentralized finance (DeFi) platforms, DAOs, and NFT projects. These provisions were removed after feedback from industry stakeholders.
Circle Credits Advocacy Efforts for Balanced AMLR Outcome
Hansen credited the efforts of crypto advocacy groups for helping to shape the final version of the AMLR. “Education and advocacy efforts were key in ensuring that the regulation maintained a balance between safeguarding against illicit activities and promoting innovation,” he explained. The changes to the regulation reflect the industry’s input and ensure that Europe’s crypto landscape remains competitive.
Hansen warned, however, that misinformation surrounding the AMLR could still distort public understanding of the regulation. He emphasized the importance of clear communication and urged individuals to avoid spreading incorrect information.
While the AMLR will impact service providers, Hansen also raised concerns about the potential regulatory overlap between the Markets in Crypto-Assets (MiCA) Regulation and the Payment Services Directive 2 (PSD2). He warned that this overlap could lead to higher compliance costs for euro stablecoin issuers, potentially doubling their financial burdens by 2026.
Circle’s EU policy chief described this as a potential “regulatory own goal” for the EU. He called on regulators to address this issue before it escalates and becomes a significant challenge for the industry.
The AMLR, as it currently stands, is set to take effect in 2027. Meanwhile, industry stakeholders, including Circle, continue to monitor the regulation’s progress and advocate for a regulatory environment that supports innovation while addressing risks like money laundering and terrorism financing.
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