- The recent implementation of the EU’s Markets in Crypto Assets Regulation (MICAr) has generated confusion among USDT users; however, a renowned crypto analyst has provided detailed insight on how to work around it.
- According to him, users who still want to maintain their privacy should register with a non-KYC exchange.
Several reports have confirmed the delisting of the largest stablecoin in the world, Tether (USDT), following the implementation of EU’s Markets in Crypto Assets Regulation (MICAr) on December 30. An analyst, Mike Williams, has opened a thread on his X handle to provide more context, analysis, implications, and solutions to this claim.
On December 30th $USDT will be delisted in EU on most Central Exchanges. The MICAr regulations will come into full effect in Europe, and the USA will soon follow! This will change #Crypto forever. Here is everything that you need to know and my recommended workarounds
— Mike Williams (@JustMike_Crypto) December 27, 2024
What is MICAr
According to Williams, MICAr is a comprehensive regulation that establishes a licensing regime for crypto businesses while introducing an effective Know Your Customer (KYC) and anti-money laundering (AML) requirement. Fascinatingly, it comes with several provisions, including the Travel Rule.
According to Williams, this provision requires crypto businesses to facilitate transactions above 0 Euros to capture the identity information of the senders and the recipients. Per the information, this may include exchange transactions, hot wallets, and cold wallets.
- Exchange to Exchange transactions: This requires that exchanges operating under an EU license exchange personal details with both the sender and the recipient.
- Hot and Cold Wallets: Users would be required to link their identity to any wallet they own to provide complete insights into all transactions to crypto exchanges.
The Delisting of Tether (USDT)
Further throwing more light on the implications, Williams highlighted that USDT would be delisted and more stablecoins would follow. However, USDC appears compliant and would be allowed to operate.
In his post, Williams pointed out how personal wallets do not pose any risk of criminal activity since they do not provide on and off-ramp for cryptos. Meanwhile, users move their assets to centralized exchange to convert them to fiat. Even so, the regulation requires that users complete KYC verification for offline wallets.
The Utmost Implications
Having recognized that the regulation is meant to fight criminal activity, money laundering, and tax evasion, Williams pointed out the desperate attempt to keep users in the traditional banking system and maintain the relevance of traditional finance. According to him, this initiative is the complete opposite of what crypto was created for, as it violates personal privacy and leads to identity fraud.
This is the opposite of what Crypto was built for and heavily violates personal privacy. We will not know where and how our personal information will be shared and stored. It is a HUGE risk to identity fraud instead.
How to Go Around This
According to Williams, there are two main solutions to protecting personal privacy amidst this implementation. The first is to register with a non-KYC exchange. The second is to go for new offline wallets.
Throwing more light on this, an analyst called Axel Bitblaze has explained that crypto investors in the EU can still hold USDT on a non-custodial wallet and trade them on Decentralized Exchanges (DEXs). It is also important to note that this restriction applies to trading USDT on MiCA-compliant exchanges.
