Cryptocurrencies in the European Union will soon cease to be anonymous
The main advantage that has made cryptocurrencies so popular is their complete anonymity.
Crypto wallets are anonymous and don't require identification documents when opening, but the era of anonymity is likely gradually coming to an end.
From 30 December 2024, companies operating with cryptocurrencies in Europe will have to comply with EU rules, according to a new regulation (No. 2023/1113) adopted on 31 May 2023.
It requires identification of the actual owner and controller of wallets in any transactions involving non-custodial (personal) addresses.
Blockchain addresses will become somewhat similar to bank accounts, where anonymity is no longer guaranteed.
It's quite difficult to imagine how this identification will be implemented in practice. Most likely, the first time you exchange from a new wallet, the company conducting the exchange will request identification, and then this data will be linked to the cryptocurrency wallet.
After this, this wallet will become personalized and all its transactions through third-party companies will be linked to a specific person.
This means that after December 30, 2024, it will be quite difficult to anonymously exchange cryptocurrencies for currencies of EU countries.
But don't be discouraged, as there will still be shady exchange schemes, like those operating today in Ukraine, where cryptocurrency transactions are completely prohibited, but exchanges still occur.
The new regulation will most severely affect exchanges at Bitcoin cash machines (BTC machines) and companies that conduct offline exchanges directly with the client.
In these cases, identification is still required if the transaction amount exceeds 1,000 euros, but after the new regulation, identification will become mandatory.
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