The U.K. decides to take a U-turn to not implementing the collection of wallets data

According to a document published by the United Kingdom treasury, the government is not going to implement its proposed version of a controversial law that aimed to require all senders of funds to private crypto wallets to collect details of the receivers.

Document rivals that the Treasury now does not think it would make sense to collect data for unhosted or private wallets. It reads:

“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.”

To avoid money laundering and terror financing, the creator and beneficiary of funds must be identified, according to Financial Action Task Force (FATF) rules. The Treasury said the rule should be implemented uniformly across the financial services industry, “regardless of the technology being used to facilitate transfers,” in a consultation document released last July.

“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,” the Treasury stated in a July document.

The proposal wanted KYC from unhosted, private wallets

The rule would have required the sender of any transaction between unhosted wallets to obtain know-your-customer (KYC) data from the receiver if it had been adopted as planned. Concerns regarding whether some companies, such as smart contracts with their own wallets, would be able to comply, as well as whether the data would be safe if any random individual had to hold it, prompted a backlash in the United States.

The government of the United Kingdom still wants to ensure some level of compliance with the FATF’s travel rule, which recommends some level of data collection to combat illegal activities like money laundering.

Moreover, as TheCoinRise reported back in October, the FTAF published anti-money laundering guidelines for the companies and individuals to follow.