- The European Union has finalized regulations to ban anonymous crypto accounts and privacy coins by July 1, 2027
- The Anti-Money Laundering Regulation (AMLR) prohibits financial institutions and crypto service providers from handling privacy-focused cryptocurrencies like Monero (XMR), Zcash (ZEC), and Dash
- A new regulatory body, the Anti-Money Laundering Authority (AMLA), will oversee compliance, directly supervising major crypto firms operating across multiple EU member states
The European Union is set to enforce strict anti-money laundering rules targeting the cryptocurrency sector, with anonymous crypto accounts and privacy coins banned from 2027. This means that the likes of Monero, Zcash, and Dash will be banned across the bloc, with all crypto wallets requiring Anti-Money Laundering/Know Your Customer (AML/KYC) protocols. A new regulatory authority will monitor the compliance of major crypto providers to ensure they follow the updated regulations.
EU Finally Brings the Hammer Down
The EU has been trying to clamp down on anonymous crypto use since 2018, and in the imminent introduction of the Anti-Money Laundering Regulation (AMLR), it seems to have achieved this goal. The new rules will come into effect on July 1, 2027, with financial institutions, credit institutions, and crypto-asset service providers banned from maintaining anonymous accounts or facilitating transactions with privacy-enhancing cryptocurrencies. The regulation aims to bring crypto into closer alignment with traditional financial systems by increasing transparency.
The AMLR directly targets privacy coins like Monero, Zcash, and Dash, which are designed to obscure transaction details. Authorities argue that these tokens are commonly used in illicit activities due to their anonymizing features. Under the new rules, crypto transactions over €1,000 will require identity verification, a measure intended to prevent money laundering and terrorism financing.
AMLA to Oversee Enforcement
To ensure enforcement, the EU will create a centralized Anti-Money Laundering Authority (AMLA). This body will supervise up to 40 crypto-asset service providers operating across at least six EU member states. Selection will be based on factors such as user base size and transaction volumes, with a focus on firms handling more than €50 million annually or having more than 20,000 users.
While policymakers assert that these measures are crucial for combating illegal financial activities, critics argue they threaten financial privacy and innovation. Privacy advocates are especially concerned that the outright ban on privacy coins could hurt users with legitimate reasons for seeking anonymity, such as activists or those in oppressive regimes. Nonetheless, with the clock ticking toward 2027, crypto providers will have to either comply with the AMLR or forfeit access to the EU market.
The move will bring the EU into line with other jurisdictions, most notably parts of Asia, where privacy coins have been banned for several years.
