In the context of the European Union (EU) announcing plans to ban privacy-centric cryptocurrencies from 2027, two prominent representatives in this field, Monero (XMR) and Zcash (ZEC), are experiencing respective declines of 1.4% and 3.6% on the day.
Source: CoinGecko
EU tightens control over anonymous coins
According to the newly released Anti-Money Laundering (AML) Handbook by the European Cryptocurrency Initiative (EUCI), the European Union will officially impose a ban on anonymous coins such as XMR and ZEC under the Anti-Money Laundering and Counter-Terrorism Financing Regulations (AMLR) effective from July 2027.
Specifically, businesses and financial institutions within the EU will no longer be allowed to provide services related to digital assets that enhance anonymity. Additionally, maintaining anonymous cryptocurrency accounts, as well as self-custody wallet addresses at financial institutions and exchanges, will also be banned.
EUCI stated in the report:
“Anonymous cryptocurrency accounts and other anonymization tools hinder the traceability of transactions, complicating the detection of money laundering activities and impairing effective customer due diligence processes.”
Alongside this, the AMLR framework also provides guidance similar to the Crypto Assets Market Regulation (MiCA), requiring businesses to comply with Customer Due Diligence (CDD) regulations to combat money laundering and terrorist financing.
Large businesses will be directly monitored
Notably, cryptocurrency asset providers engaged in cross-border activities in at least six EU member states will be directly supervised by the European Anti-Money Laundering Authority (AMLA).
In July 2027, AMLA will select a maximum of 40 high-risk organizations based on technical criteria such as:
There are at least 20,000 customers
Or trading volume reaches 50 million euros in each host member state.
Anonymous coins still attract interest
Despite facing tighter regulatory scrutiny, security tokens continue to show strong resilience. Over the past week, Monero has risen more than 20%, and Zcash has increased nearly 5%.
Notably, the rise of Monero comes after reports that hackers converted approximately $330 million from stolen Bitcoin to XMR to obscure the transaction. The case was uncovered by on-chain detective ZachXBT, with indications related to about 3,500 BTC.
Immediately following this news, the price of Monero surged 40%, reaching $329 before adjusting back below $300 at the time of writing. This trend indicates the appeal of privacy tokens not only to investors but also to malicious actors, keeping them at the forefront of global legislators' regulatory focus.
Disclaimer: This article is for informational purposes only and is not investment advice. Investors should conduct thorough research before making decisions. We are not responsible for your investment decisions.