The European Union is on the verge of implementing significant changes that will reshape the landscape of cryptocurrency regulation in Europe. With the introduction of new Anti-Money Laundering (AML) rules scheduled to take effect by 2027, the EU is poised to ban anonymous cryptocurrency accounts and privacy-preserving tokens.
Under the forthcoming Anti-Money Laundering Regulation (AMLR), not only credit and financial institutions but also cryptocurrency asset service providers (CASPs) will be prohibited from maintaining anonymous accounts or facilitating transactions using privacy-focused cryptocurrencies. This move aligns with the EU’s broader strategy to strengthen its AML framework and curb the misuse of financial assets.
As outlined in the AML Handbook published by the European Crypto Initiative (EUCI), Article 79 of the AMLR implements strict restrictions on anonymous accounts. It emphasizes that institutions must ensure transparency in financial dealings to prevent illicit activities.
This regulatory change encompasses a wide range of financial instruments, including bank accounts, payment systems, and safe-deposit boxes, extending to “crypto-asset accounts that facilitate the anonymization of transactions” and those involving anonymity-enhancing cryptocurrencies. The specifics of these regulations will come into clearer focus as the EU continues its work on implementing and delegating acts, which put the finer points into practice.
Vyara Savova, senior policy lead at EUCI, noted, “The regulations (the AMLR, AMLD, and AMLAR) are final, and what remains is the ‘fine print’—aka the interpretation of some of the requirements through the so-called implementing and delegated acts.”
As the landscape evolves, Savova further stated that centralized crypto projects must align their internal processes and policies with the established framework to comply with new regulations.
Increased Oversight of Crypto Service Providers
Under the new directives, CASPs will find themselves under enhanced supervision, particularly those operating across at least six EU member states. The European Anti-Money Laundering Authority (AMLA) plans to initiate direct supervision over approximately 40 entities, with at least one being selected from each member state. This selection process is set to commence on July 1, 2027.
To qualify for this supervision, firms must meet specific “materiality thresholds,” which include maintaining a minimum customer base of 20,000 residents in the host country or a total transaction volume exceeding 50 million euros (around $56 million). Additional regulations will also require customer due diligence for transactions that surpass 1,000 euros (approximately $1,100).
As the EU moves towards tighter regulations, it underscores a global trend of increasing scrutiny and transparency in the cryptocurrency space. Stakeholders in the industry will need to stay abreast of these changes to navigate the complexities brought on by these new regulations effectively.
