Mikolaj Barczentewicz on the EU Travel Rule
Cointelegraph – ICLE Senior Scholar Mikolaj Barczentewicz was quoted by Cointelegraph in a story about the impacts the European Union’s Transfer of Funds Regulation could have on the crypto market. You can read full story here.
Mikolaj Barczentewicz, associate professor at the United Kingdom’s University of Surrey, told Cointelegraph:
“The TFR proposal doesn’t ban self-custodied wallets, but it does incentivize service providers to treat them as ‘high risk’ for money laundering.[…] It may become practically very difficult to transact using self-hosted wallets.”
Defenders of the TFR might respond that it’s not regulators’ fault that businesses are not better at risk-based analysis and at distinguishing situations of genuinely high risk of criminality, but “I don’t think that answer works,” continued Barczentewicz. “It shows a lack of understanding — or care — for the fact that regulations need to be designed to be workable in the real world. The EU is basically saying to businesses: ‘You figure it out.’”
However, the biggest threat to self-custodied wallets in Barczentewicz’s view “is something like the scenario we’ve been watching in reaction to Tornado Cash being sanctioned by the U.S.: Businesses are afraid and engaging in over-compliance, doing more than the law requires.”