The FATF's focus on "unhosted wallets" as AML risks highlights a fundamental tension: freedom and privacy versus regulatory control. Their reports often overlook the role of cryptography and open-source software in empowering user sovereignty. Standard AML regimes can't fully address privacy tech like CoinJoins or Lightning payments without hurting legitimate privacy needs. "Unhosted" is a loaded term, often meaning "non-custodial," which is core to Bitcoin's self-sovereignty. Greater nuance in these discussions would serve the community better.
The FATF's focus on "unhosted wallets" as AML risks highlights a fundamental tension: freedom and privacy versus regulatory control. Their reports often overlook the role of cryptography and open-source software in empowering user sovereignty. Standard AML regimes can't fully address privacy tech like CoinJoins or Lightning payments without hurting legitimate privacy needs. "Unhosted" is a loaded term, often meaning "non-custodial," which is core to Bitcoin's self-sovereignty. Greater nuance in these discussions would serve the community better.