𝐊𝐞𝐲 𝐋𝐞𝐬𝐬𝐨𝐧𝐬 𝐟𝐫𝐨𝐦 6 𝐌𝐨𝐧𝐭𝐡𝐬 𝐨𝐟 crypto 𝐓𝐫𝐚𝐯𝐞𝐥 𝐑𝐮𝐥𝐞 𝐈𝐦𝐩𝐥𝐞𝐦𝐞𝐧𝐭𝐚𝐭𝐢𝐨𝐧 𝐢𝐧 𝐭𝐡𝐞 𝐄𝐔 𝐯𝐬 𝐔𝐊 🇪🇺 🇬🇧 The EU should reassess its approach to transfers involving third-party self-custody wallets. 🇬🇧 𝐔𝐊 • 100% of CASPs compliant by end of 2023 • 13-month runway, joint public-private guidance, regulator-led testnets • Crucially: risk-based approach to self-custody → ID checks only when necessary and high-risk ➡️ Result: Minimal disruption, full compliance, and preserved user autonomy 🇪🇺 𝐄𝐔 • Only 28.8% of CASPs compliant by mid-2025 • Main issue from my perspective: EBA guidance now requires ID checks for all third-party self-custody transfers > €1k, even when risk is low • This extends what had been agreed upon in the Level 1 law, which required ID checks (e.g., satoshi tests/message signing) only for > €1k transfers to/from self-custody wallets owned by the CASP’s own customer. • Now, CASPs are being pushed to verify the identity of someone who isn’t their customer—operationally challenging if not impossible. 🔒 The outcome? • EU CASPs are now 55% more likely to block self-custody transfers than global peers according to @notabene_id • This fuels de-risking, reduces EU CASP competitiveness, and drives users outside the regulated perimeter • Test it yourself: try sending €1k from your EU exchange to someone else’s wallet—you’ll likely be blocked I highly recommend reading @CatarinaVelos12 breakdown of how the UK and EU have approached the Travel Rule and strongly agree with her (link in comments). The EU should realign supervisory expectations with the risk-based approach originally agreed in the Level 1 text. Otherwise, the Travel Rule could end up undermining its own purpose: increasing transparency without excluding users from the regulated crypto ecosystem.(Patrick Hansen)