ZachXBT urges self-custody amid EU rules
Share
- Blockchain investigator ZachXBT advised European cryptocurrency users to use self-custody wallets before transferring assets between centralised exchanges.
- The comments follow stricter compliance checks under the European Union's Crypto Travel Rule, which has increased transfer requirements.
- Exchanges are updating their platforms to comply with the regulations, with additional verification expected for some transactions.
Blockchain investigator ZachXBT advised cryptocurrency users in Europe to move assets into self-custody wallets before transferring them between centralised exchanges, citing increased compliance requirements under the European Union's Crypto Travel Rule.
The comments followed complaints from users about more complex transfers involving Bybit, as exchanges implement additional checks under the EU's Transfer of Funds Regulation, which took full effect in December 2024.
ZachXBT did not include a direct executive quote, but said using a self-custody wallet before sending assets to another exchange is generally a more practical approach and added that he had not seen convincing evidence the Crypto Travel Rule has effectively reduced money laundering.
Under the regulations, crypto service providers must collect and share information about transaction senders and recipients, while some exchanges now require users to verify ownership of self-custody wallets and may delay transfers until compliance reviews are completed.
Bybit said it is adapting its European operations to meet the new regulatory framework, including migrating eligible users to licensed regional platforms and expanding support for compliant stablecoin services, while there was no direct market reaction following the comments.
Supporters of the Crypto Travel Rule argue it improves transparency and helps authorities track suspicious transactions, while critics say it increases compliance costs and creates additional friction for users transferring digital assets.
As the European Union continues implementing the Markets in Crypto-Assets framework and the Transfer of Funds Regulation, exchanges and users are expected to face more extensive compliance requirements for cryptocurrency transactions.