The European Union will officially ban anonymous crypto accounts and privacy-focused cryptocurrencies like Monero (XMR) and Zcash (ZEC) starting in 2027. This decision is part of the EU’s new Anti-Money Laundering Regulation (AMLR), which targets financial secrecy and aims to increase transparency in the digital asset ecosystem.
New AML Laws Target Anonymity in the Crypto Sector
Under Article 79 of the AMLR, banks, financial institutions, and crypto-asset service providers (CASPs) must stop offering or maintaining anonymous accounts. They will also lose the ability to support transactions involving privacy coins. This rule applies not only to centralized platforms but also to various financial services, including:
- Traditional bank accounts
- Electronic wallets
- Savings passbooks and safety deposit boxes
- Crypto wallets and services that allow transaction anonymization
The European Crypto Initiative (EUCI) published the AML Handbook outlining these prohibitions. The document makes it clear that anonymous crypto usage will no longer have a place within the EU’s financial framework.
AMLA Will Supervise CASPs Across the EU
Starting on July 1, 2027, the European Anti-Money Laundering Authority (AMLA) will begin directly supervising CASPs operating in six or more EU member states. In the initial phase, AMLA plans to select 40 crypto companies for supervision, ensuring at least one entity per country.
To qualify for direct oversight, firms must meet one of the following thresholds:
- At least 20,000 customers residing in the host country
- Total crypto transaction volume above €50 million (around $56 million)
Additionally, all CASPs must perform customer due diligence for any transaction exceeding €1,000 (~$1,100). This requirement places greater responsibility on centralized exchanges and crypto platforms to verify user identities and monitor activity more closely.
Privacy Coins Face Increased Global Pressure
Privacy coins like Monero, Zcash, Dash, and Horizen prioritize user anonymity by masking transaction details. However, this feature also attracts illegal usage, including money laundering and terrorist financing. As a result, many governments and exchanges have taken action to delist these assets.
In recent years, major crypto exchanges have removed privacy coins:
- OKX delisted XMR, DASH, ZEC, and ZEN in December 2023
- Binance removed XMR, MOB, FIRO, and ZEN in September 2023
- HTX (formerly Huobi) delisted DASH, DCR, FIRO, XMR, XVG, ZEC, and ZEN in September 2022
Outside of Europe, countries like South Korea, Japan, and the UAE have also imposed strict regulations on privacy-focused digital assets. The EU’s decision aligns with this global trend, signaling a unified stance against anonymous crypto transactions.
CASPs Must Update Internal Policies to Comply
According to Vyara Savova, senior policy lead at EUCI, the overall legal structure of AMLR is final. However, the implementation process remains ongoing. The European Banking Authority (EBA) will release delegated acts and technical guidelines to clarify how service providers should apply the rules.
Savova emphasized that centralized platforms regulated under MiCA (Markets in Crypto-Assets Regulation) must begin updating their internal operations. Waiting until the last minute could lead to non-compliance and potential enforcement actions once AMLR goes into full effect.
A Critical Step in Europe’s Crypto Regulation Strategy
The AMLR is part of a wider effort by the EU to control digital finance, protect investors, and prevent criminal activity. Alongside MiCA and AMLD (Anti-Money Laundering Directive), this regulation marks a turning point in how Europe manages the fast-growing crypto sector.
By banning anonymous crypto accounts and privacy coins, the EU sends a clear message: financial transparency and legal compliance are non-negotiable in the digital age. While some view this move as a blow to individual privacy, regulators see it as a necessary trade-off to build a safer, more trustworthy financial system.
