ZachXBT said on July 2 that users should consider moving crypto into a wallet they control before sending funds to another centralized exchange or to an individual. Using a self-custody wallet as an intermediate stop can make exchange-to-exchange transfers easier to follow and clearer for users handling deposits and withdrawals.
In his view, sending funds first to a self-controlled wallet and only then to another centralized venue is the more cautious route. He also said there is no convincing evidence showing that the Crypto Travel Rule has effectively reduced money laundering.
EU transfer rules are adding new compliance checks
The stricter environment in Europe is tied to the European Union’s Transfer of Funds Regulation. Since December 2024, the Crypto Travel Rule has been fully applied to crypto service providers, requiring exchanges to collect and share specific information about senders and recipients for each transaction. The stated purpose is to address money laundering and terrorist financing risks in digital assets.
That has already changed exchange workflows in affected areas. Platforms such as Bybit have added extra verification steps for deposits and withdrawals, and users may be asked to prove ownership of self-custody wallets. Some transfers can also be left pending until compliance reviews are completed. The transaction still moves, just with more checks around it.
Self-custody can be an intermediate step, not a guarantee
ZachXBT’s suggested process relies on a software wallet or a hardware wallet as the middle step. Even so, it does not remove the chance of extra review in every case. High-value transactions, or transfers flagged by risk-monitoring systems, may still trigger requests for additional documentation from the platform.
ZachXBT is widely known in the crypto sector for on-chain investigations that trace suspicious transfers, wallet links, and large fund movements. His analysis is frequently cited in cases tied to exploits, wallet associations, and notable asset transfers, which helps explain why his comments drew attention.
Bybit is reshaping its European setup
Bybit is also adjusting its European operations to fit the regional regulatory framework. According to the source material, the exchange is migrating eligible users to licensed regional platforms and rolling out new stablecoin initiatives centered on USDC and EURC to support compliant digital asset use across the European Economic Area.
Debate over the Crypto Travel Rule remains active. Supporters say transaction data sharing improves transparency and makes suspicious flows easier to trace. Critics argue the rules raise compliance costs, slow transfers, and create extra friction for ordinary users. As Europe continues enforcing MiCA and Travel Rule obligations, both exchanges and clients are expected to face tighter controls.