Unhosted wallets
A bank transfer runs between two accounts at regulated institutions, and each institution knows its customer. A crypto transfer can end in a wallet that no institution runs: an unhosted wallet, also called self-hosted wallet, where the owner holds the private key. The EU travel rule therefore sets its own duties for transfers between a crypto-asset service provider and such a wallet. Dated events on stablecoins and digital money are in the calendar below.
What the EU travel rule requires
The Transfer of Funds Regulation (EU) 2023/1113 has applied to crypto transfers since December 30, 2024, and calls an unhosted wallet a self-hosted address. A crypto-asset service provider that sends to or receives from such an address collects the originator and beneficiary data, as for any transfer. Above 1,000 euros it must also check that its own customer owns or controls the address, and linked transfers count together, as 21 Analytics explains. The provider keeps the data for five years.
A transfer between two unhosted wallets, with no provider involved, falls outside the regulation. 21 Analytics walks through the borderline cases in an article on when the regulation applies.
How providers check ownership
The EBA travel rule guidelines, EBA/GL/2024/11, name methods such as signing a message with the key of the wallet or sending a small test amount from it, the so-called Satoshi test, as Spark summarizes. BaFin stated in July 2025 that a self-declaration by the customer is not enough. Switzerland goes further and verifies every transfer to or from an unhosted wallet, whatever the amount.
For a customer who keeps bitcoin in a hardware wallet or an MPC wallet, this means an extra step at the exchange for withdrawals above 1,000 euros.
Outside the EU
In the United States, FinCEN withdrew its 2020 proposal on reporting transfers to unhosted wallets on August 19, 2024. In the EU, Article 37 of the regulation asked the Commission to assess by June 30, 2026 whether the rules for self-hosted addresses work, according to Spark.
Finance Loop, the meeting place for stablecoins and digital money
Finance Loop is the meeting place for people at banks, payment firms and crypto firms who build or use stablecoins. Finance Loop is a strategic partner of the Digital Euro Association and was a partner of the Digital Euro Conference. The Bybit EU x Circle Roadshow in Frankfurt had two panels on stablecoins, USDC and EURC.
Upcoming events on stablecoins and digital money
Payments & Digital Money
Risk & Compliance
Investment & Digital Assets
What is an unhosted wallet?
A crypto wallet whose private key the owner holds, with no crypto-asset service provider in between. Hardware wallets and wallet apps such as MetaMask are examples. EU law calls it a self-hosted address.
Are unhosted wallets legal in the EU?
Yes. Holding crypto in an unhosted wallet is legal. The duties fall on providers: they collect transfer data and, above 1,000 euros, verify that their customer controls the wallet.
What is the difference between hosted and unhosted wallets?
A hosted wallet is an account at an exchange or custodian, which holds the keys and knows the customer. In an unhosted wallet the owner holds the keys, and no institution stands between the owner and the blockchain.
Unhosted wallets and Finance Loop
Finance Loop covers crypto transfers in its Payments & Digital Money track, together with the travel rule and stablecoin payments. Finance Loop brings people from banks, payment firms, crypto firms and their supervisors together at events in Frankfurt, Munich, Berlin and Hamburg.
Finance Loop is a professional network and has the goal of driving the adoption of emerging technologies in finance, such as AI, digital payments, cloud and blockchain solutions. Finance Loop helps its members build skills and personal networks in these fields: Investment & Digital Assets, Payments & Digital Money, Digital Infrastructure & Sovereignty, and Risk & Compliance.