The UK government has performed a U-turn on plans to force the senders of funds to private cryptocurrency wallets to collect identification details of the recipients.
Anti-money laundering and terror funding standards – Under Financial Action Task Force (FATF) – require the originator and recipient of funds being transferred need to be identified.
The Treasury said in a consultation document last July that this rule should be applied across the financial services industry.
It wrote: “Cryptoasset firms will need to put in place systems for ensuring that personal information of the originator and beneficiary of a cryptoasset transfer is transmitted and received alongside the transfer, in an appropriate format.”
However the Treasury has now backtracked on those plans based on feedback received in the last 12 months.
“Instead of requiring the collection of beneficiary and originator information for all unhosted wallet transfers, cryptoasset businesses will only be expected to collect this information for transactions identified as posing an elevated risk of illicit finance,” read a new document.