Summary: The Uk has stepped back on plans to launch a new crypto transparency consultation proposed in July of 2021. The 56-page report from July published by the UK Treasury proposed requiring senders of any cryptocurrency to disclose the owner's identity of the wallet receiving the transaction. Limited information would be required for transfers under 1,000 ...

The Uk has stepped back on plans to launch a new crypto transparency consultation proposed in July of 2021. The 56-page report from July published by the UK Treasury proposed requiring senders of any cryptocurrency to disclose the owner's identity of the wallet receiving the transaction. Limited information would be required for transfers under 1,000 British Pounds and needed substantial information if over that threshold.

The update to the proposal released Monday suggested that "Instead of requiring the collection of beneficiary and originator information for all unhosted wallet transfers, crypto-asset businesses will only be expected to collect this information for transactions identified as posing an elevated risk of illicit finance."


Under Financial Action Task Force exists to stop terror funding and money laundering. The regulations suggested that the originator and recipient of funds being transferred must be identified. In the consultation document published in July of 2021, the Treasury said the rule needs to be consistent across the financial services industry, "regardless of the technology being used to facilitate transfers."

The July consult stated, "Crypto Asset firms will need to put in place systems for ensuring that personal information of the originator and beneficiary of a crypto asset transfer is transmitted and received alongside the transfer, in an appropriate format."

If the regulations were implemented in the pre-update format, the rule would have required the sender of any transaction between unhosted wallets to gather "know your customer" data from the receiver. A similar proposal from the U.S. received substantial backlash due to concerns about if it would even be possible for some entities to comply, such as smart contracts with their own wallets, and if the data would be safe if any person had to store it.

This update is a substantial increase in the level of privacy that policymakers are comfortable with, given that previous proposals have shown a much more concerning outlook for crypto users' privacy.


Author: Garrett Meifert