Crypto transfers in Europe are facing restrictions due to stringent know-your-customer (KYC) procedures and blocks, with potential links to the Travel Rule, as reported by various local sources.
According to Hasu, the strategy lead at Flashbots, Coinbase is currently blocking transfers in Europe to recipients other than the user. Moreover, users are required to sign a message to prove ownership when sending crypto to a self-custodial wallet. Even when receiving funds, the sender must be identified, including providing passport identification, creating obstacles even when transferring money to a Coinbase account from another source.
Sam Harper, a crypto general council member at Argent, echoed similar challenges, mentioning the difficulty in signing a message from a self-custodial wallet, leading to transaction abandonment. Ignas, an analyst, shared that OKX Europe imposes similar steps to Coinbase, while James Hunsaker, co-founder of Monad Labs, expressed concerns about the current regulatory environment for crypto in Europe.
Armani Ferrante, CEO of Backpack, attributed these new compliance measures to the Travel Rule, stating that such requirements are becoming increasingly common and mandatory in certain jurisdictions. Jordan Fish, known as Cobie in the crypto community, also emphasized the impact of the Travel Rule on these compliance requirements.
The Travel Rule, established by the Financial Action Task Force (FATF), mandates financial institutions to share specific information about the originator and beneficiary of wire transfers and similar payments.
Blockchain developer Kris O’Shea recounted his experience of having to confirm the original sender when attempting to deposit USD Coin (USDC) into his Revolut card from a MetaMask wallet. Additionally, on Jan. 7, José Maria Macedo, co-founder of Delphi Labs, highlighted that Banco of Investimentos Globais (BiG), one of Portugal’s largest banks, notified clients of blocking fiat transfers to crypto platforms in compliance with guidelines from the European Central Bank (ECB), the European Banking Authority (EBA), and the Bank of Portugal, citing risks associated with digital asset offerings.
As regulatory scrutiny intensifies in Europe, the crypto community is navigating through increasing compliance requirements, potentially influenced by the evolving landscape of the Travel Rule and other regulatory frameworks.