Self-hosted portfolios in Kraken’s crosshairs. The platform is complying with UK regulations, and is now asking its users to detail personal information about “non-custodial” portfolios. What’s the difference?
Kraken now monitors certain self-hosted wallets
The shift was reported by CryptoSlate analyst James Van Straten and confirmed by Kraken’s customer service team. All non-custodial wallets, i.e. those where users hold the keys, must be reported. This means that users are forced to list their wallets… But also those to whom they send money, even if these do not belong to them :
Oh the UK is finished, surveillance state it is. pic.twitter.com/afIamE970S
– James Van Straten (@jvs_btc) February 13, 2024
“If you do not hold or control non-custodial portfolios […] please detail the addresses, the identity of the holder or the person who controls it, as well as their residential address. “
To give an example, a UK customer who would like to send cryptocurrencies from their Kraken account to a friend’s wallet would need to communicate the friend’s name and postal address, even if they are not a Kraken customer. The platform’s instructions are also stern: they explain to users that failure to respond would result in their Kraken account being frozen.
UK regulations regarding non-custodial portfolios
The UK has taken particularly strict oversight measures for cryptocurrency users. They require crypto-asset service providers to collect very precise information on their users… Including on the transactions they make with external entities. So it’s not just Kraken that will have to implement these measures.
Other similar decisions by the British government were noted in 2023. Law enforcement agencies can now seize cryptocurrencies without a conviction. The country is therefore particularly firm with the sector, to the extent that players including Binance have decided to cease offering services locally.
As we’ve just seen, the UK is far from being the most crypto-friendly of territories. But neither is the European Union (EU): its new rules for monitoring self-hosted wallets are similar. In January, the Council and Parliament reached a provisional agreement on new, stricter rules. Applications of this type could therefore soon be arriving in EU countries.
