EU crypto users are going to find it harder to keep their activities private if the European lawyers get their way.
The European Union is planning to ban anonymous cryptocurrency accounts and privacy-preserving tokens starting in 2027. This change comes as part of the new Anti-Money Laundering Regulation (AMLR).
The AMLR affects credit institutions, financial institutions, and crypto asset service providers (CASPs). CASPs are businesses that offer services related to cryptocurrencies, such as exchanges and custody providers. The regulation also covers traditional financial instruments like bank accounts and safe-deposit boxes.
CASPs will be prohibited from maintaining anonymous accounts or handling privacy coins.
Privacy coins, such as Monero (XMR) and Zcash (ZEC), use cryptography to obscure transaction details.
The ban claims to increase transparency in cryptocurrency transactions.
Anti-Money Laundering Authority (AMLA)
CASPs operating in at least six EU member states will face direct supervision.
Starting July 1st, 2027, the AMLA will select 40 entities for this direct oversight. Selection criteria include serving at least 20,000 customers in a member state or exceeding €50 million in transaction volume.
Mandatory customer due diligence (CDD) will be required for transactions above €1,000.
CDD involves verifying the identity of customers to prevent money laundering and other financial crimes.
These new regulations expand upon existing measures like the Markets in Crypto-Assets Regulation (MiCA).
MiCA established a comprehensive regulatory framework for crypto assets in the EU. Implementing and delegated acts will provide further details on the practical application of these regulations.
What This Means for Us
The AMLR is a significant move towards greater regulation in European crypto.
A ban on anonymous accounts and privacy coins, with increased oversight and mandatory due diligence, will impact how we interact with cryptocurrencies across the EU.
Although the changes aim to go after money laundering and other illegal activities using cryptocurrencies, it will impact honest people and their privacy.