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Every once in a while, governments and legislators attempt to make using Bitcoin and other cryptocurrencies more complicated or difficult. In a more recent example, the European Union voted on a new anti-money laundering legislation, which mainly focuses on limiting cash payments and regulating financial institutions. Some of these rules will also impact service providers for cryptocurrencies such as brokers or exchanges and regulate payments made to these services. For many, this raises the question of how regulations like this can affect users of non-custodial wallets such as the BitBox02 in the future.
To clear the air straight away, this specific new regulation explicitly excludes “providers of hardware and software of self-hosted wallets” that do not have access to the wallets themselves, which is the case for all common hardware wallet manufacturers, including BitBox, of course. As such, non-custodial wallets and peer-to-peer transactions will neither be banned nor directly regulated. Furthermore, the now proposed limit on cash payments does not extend to cryptocurrency transactions, meaning that users of non-custodial wallets will be able to purchase goods and services in the EU without such restrictions. In short, nothing really changes for users of BitBox hardware wallets for now.
Being based in Switzerland, EU legislators have no direct jurisdiction over BitBox as a company. In theory, the Swiss government would be able to directly impose certain restrictions on BitBox, of course. However, Switzerland has a good track record of respecting the constitutional right to privacy, offers a place of neutrality outside the jurisdiction of the United States or European Union and generally has strong individual rights. While being a Swiss company is a positive, let’s explore why users of BitBox hardware wallets do not have to rely on political entities or even us as a company anyway.
Financial sovereignty
One of our core principles is providing users with as much financial freedom and independence as possible, which is why we do not track how you use your BitBox02, how much cryptocurrency you own or who you are transacting with.
Even if we wanted to, BitBox as a company does not have control over your cryptocurrency and thus cannot restrict and regulate the way you use it. On a technical level, no one can stop you from using your BitBox02 to send and receive transactions – only you have control over your private keys and therefore your coins. This level of sovereignty is a natural benefit of a decentralized network like Bitcoin.
Using the BitBox02 independently
To be able to transact e.g. on the Bitcoin network, the BitBoxApp needs to connect to a server, commonly known as a full node, to broadcast transactions and receive information about wallet funds. By default, the BitBoxApp is configured to use the official BitBox servers for this purpose, which, by the way, anonymize IP addresses and do not collect wallet addresses – minimizing your data footprint.
Nevertheless, we encourage users to run their own full node and configure the BitBoxApp to use it instead. This way, if our servers are ever unavailable or should we be forced to restrict access to them, you remain unaffected and can continue to use your BitBox02 without issues. If you are unable to set up a full node yourself, you can also connect to one of a friend or other third-party at any time in the future.
The BitBoxApp also contacts our servers to know about new updates and to retrieve exchange rates for displaying balances in fiat-currency. While this connection is not critically important anyway, you could set up your BitBox02 completely offline in the BitBoxApp and use it without ever connecting to one of our servers with free and open-source wallet software like Sparrow Wallet or Electrum.
As you can see, the BitBox02 is primarily just a tool – your tool – and does not depend on third parties to work, whether that’s us, the European Union or someone else.
We don’t want your data
That’s right, and it’s by choice. Privacy is a fundamental human right, which is why we aim to collect as little information about you as possible. This principle not only includes the actual usage of the BitBox02, it already starts with your order in our self-hosted webshop, where order data gets anonymized after only 30 days. We went into more detail in a dedicated blog post on user privacy, explaining which data is collected, how it is stored and why.
If you are concerned about revealing your private home address, delivering your BitBox order to a PO box or postal office is also an option if you’re living in Germany, Austria, or Switzerland. For international orders, anonymous orders are quite difficult to manage due to import taxes and other technicalities. However, you can always check for local resellers on our website to order in a more private way or even purchase a BitBox02 in person with cash.
Conclusion
Discussions about cryptocurrency regulations regularly raise valid concerns for users, but it's important to understand that self-custody solutions will remain largely unaffected, mainly because effective restrictions are simply not feasible on a technical level. Our focus on minimal data collection and user independence goes hand in hand with the benefits of a decentralized network like Bitcoin to ensure self-custody will remain possible, even under more restrictive regulatory environments.
Frequently asked questions (FAQ)
Is the EU going to ban hardware wallets?
No, there is no ban of non-custodial wallets such as the BitBox02 planned at the moment. An effective ban of self-custody is not really feasible from a technical perspective anyway.
Can BitBox restrict access to my coins?
No, we have no control over your private keys and cannot restrict you from using your BitBox02. In fact, you can use the BitBox02 independently without ever connecting to our servers.
Can I order a BitBox02 anonymously?
You can deliver your order to a PO box or postal office to avoid revealing your home address. We also offer payments in Bitcoin with minimal data collection.
What happens if BitBox does not exist anymore?
The BitBox02 does not directly depend on us as a company in order to work. Furthermore, your wallet backup is universal and can be used with other hardware and software wallets to restore access to your coins.
Don’t own a BitBox yet?
Keeping your crypto secure doesn't have to be hard. The BitBox02 hardware wallet stores the private keys for your cryptocurrencies offline. So you can manage your coins safely.
The BitBox02 also comes in Bitcoin-only version, featuring a radically focused firmware: less code means less attack surface, which further improves your security when only storing Bitcoin.
Shift Crypto is a privately-held company based in Zurich, Switzerland. Our team of Bitcoin contributors, crypto experts, and security engineers builds products that enable customers to enjoy a stress-free journey from novice to mastery level of cryptocurrency management. The BitBox02, our second generation hardware wallet, lets users store, protect, and transact Bitcoin and other cryptocurrencies with ease - along with its software companion, the BitBoxApp.