Why is ZachXBT recommending self-custody wallets for cryptocurrency transfers in Europe?

ZachXBT said cryptocurrency users should move assets to a self-custody wallet before transferring them to another centralised exchange. He argued this approach can make transfers easier to manage as exchanges apply stricter compliance checks under the European Union's Crypto Travel Rule.

What does the European Union's Crypto Travel Rule require for cryptocurrency transfers?

The European Union's Crypto Travel Rule requires cryptocurrency service providers to collect and share information about the sender and recipient of each transaction. The rules are enforced under the Transfer of Funds Regulation, which took effect in December 2024.

How are exchanges changing their procedures under the European Union's Crypto Travel Rule?

Cryptocurrency exchanges are introducing additional verification requirements under the European Union's Crypto Travel Rule. Users may be asked to prove ownership of self-custody wallets, and some deposits or withdrawals may be delayed while compliance checks are completed.

What did ZachXBT say about the effectiveness of the European Union's Crypto Travel Rule?

ZachXBT said he has not seen convincing evidence that the European Union's Crypto Travel Rule has effectively reduced money laundering. He said using a self-custody wallet before transferring assets between exchanges remains a more practical approach for users.

How is Bybit responding to the European Union's Crypto Travel Rule?

Bybit said it is restructuring its European operations to comply with the European Union's Crypto Travel Rule and wider regulatory requirements. The exchange is migrating eligible users to licensed regional platforms and expanding support for compliant USDC and EURC stablecoin services.

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ZachXBT urges self-custody amid EU rules

Written by Mahathir BayenaPublished Jul 3, 2026, 12:59 AM

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.