Self-custody compliance involves meeting regulations while holding your own digital assets. This refers to the challenge of adhering to regulatory requirements, such as anti-money laundering and counter-terrorist financing rules, when individuals or entities maintain direct control over their digital assets through personal wallets rather than relying on third-party custodians. Regulators seek methods to monitor transactions originating from or destined for self-custodied wallets without compromising user privacy or the decentralized nature of blockchain. This area presents significant legal and technological complexities for oversight bodies.
Context
News frequently covers the ongoing debate surrounding self-custody compliance, particularly in relation to the “Travel Rule” and proposals for identifying unhosted wallet users. The tension between individual financial autonomy and regulatory imperatives forms a central discussion point in this area. Future regulatory frameworks will likely explore technological solutions and new legal interpretations to address the complexities of self-custody without stifling innovation.
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