Starting from December 30, 2024, all companies conducting cryptocurrency-related activities within the European Union have been assigned new obligations that will directly impact you as a user.
To comply with the new regulations, many companies operating in the crypto-assets market had to introduce inconvenient restrictions. From now on, in most cases, you will not be able to freely transfer cryptocurrencies between multiple exchanges, brokers, or other financial entities.
To successfully transfer funds, for example, from an exchange to a physical exchange bureau, you will need to have your own private cryptocurrency wallet (e.g., in the form of a mobile app or dedicated hardware).
What is the “Travel Rule”?
The “Travel Rule” is an international standard developed by the Financial Action Task Force (FATF) to counteract money laundering and terrorism financing in cryptocurrency transactions. In the European Union, the “Travel Rule” was implemented under Regulation (EU) 2023/1113 of the European Parliament and Council, effective December 30, 2024. These regulations apply to, among others:
- Banks (e.g., Revolut)
- Payment companies (e.g., PayPal)
- Cryptocurrency exchanges
- Cryptocurrency exchange bureaus
- Brokers
- Companies offering money transfers (e.g., Western Union)
- Payment processors
- Investment firms.
The “Travel Rule” imposes an obligation on virtual asset service providers (VASPs) to collect and transfer identifying information about senders and recipients of transactions.
What does this mean for you?
Currently, there is no global, unified system for the efficient exchange of the required data between companies operating in the crypto-assets market. In practice, this means you will not be able to directly transfer cryptocurrencies from one entity to another. To make such a transaction, you must have your own private cryptocurrency wallet.
Warning! Sending funds from an exchange or to an exchange may result in a transaction being blocked. Unblocking funds can be complex, time-consuming, or even impossible. Therefore, it is crucial to have full control over your cryptocurrencies and their storage.
How to prepare for transactions at an exchange bureau?
If you plan to exchange cryptocurrencies at a physical exchange bureau, remember that each transaction will require completing the appropriate declaration and having your own private wallet. The bureau will only be able to send cryptocurrencies to your private wallet and accept funds exclusively from private wallets.
- Install a chosen application or purchase a physical hardware wallet.
- Ensure you have full control over the wallet (make a backup of the seed).
- Avoid transferring cryptocurrencies directly from an exchange to the address of an exchange bureau. If you hold cryptocurrencies on an exchange, transfer them to your private wallet before visiting the bureau.
Although the changes may seem complicated, they ultimately provide you with greater control over your funds and increased financial security. If you have any questions or concerns, do not hesitate to ask an exchange bureau employee for assistance.
What is a cryptocurrency wallet?
Cryptocurrency wallets are applications or devices that enable the secure storage of private keys and the execution of transactions. They provide you with full control over your funds, which translates into greater freedom and security for your capital.
Software wallets are free applications for mobile devices and computers that allow you to send and receive cryptocurrencies. Popular solutions include:
- Trust Wallet: an intuitive mobile wallet supporting multiple blockchains and tokens, integrated with Binance exchange.
- Coinomi: a universal wallet supporting over 1,000 cryptocurrencies, available on mobile devices and computers.
- MetaMask: a popular browser-based and mobile wallet, often used in the Ethereum ecosystem and DeFi applications.
- TronLink: a wallet dedicated to the TRON blockchain, ideal for using decentralized applications (dApps).
Hardware wallets are solutions that effectively protect private keys from hacking and malware attacks. Although the prices of these devices start at around 200 PLN, they are an investment in peace of mind and the assurance that your cryptocurrencies are secure. The most popular devices include:
- Trezor: a hardware wallet providing the highest security standards and supporting a wide range of cryptocurrencies.
- Ledger: one of the most popular hardware wallets on the market, valued for its reliability and advanced protection features.
Before using a wallet, make sure to create a backup of the recovery phrase (seed). This way, even if you lose the device, you can regain access to your cryptocurrencies. Store the recovery phrase in a secure and confidential place to avoid the risk of losing your funds.
We encourage you to follow the blog on the website quark.house. The knowledge you gain there and proper preparation will help you navigate the new regulatory landscape with ease, maintaining control and security over your cryptocurrencies.
