Europe is adopting stringent anti-money laundering standards, banning private coins and anonymous cryptocurrency account operations starting from July 1, 2027. Cryptocurrency service providers (CASP), including exchanges and financial institutions, must ensure they collect customer identification data (KYC) for all users or cease providing those services within the EU.
Private Cryptocurrencies Banned, Transactions Under Tighter Surveillance
The establishment of new security rules aims to limit transactions involving the cryptocurrencies Monero (XMR), Zcash (ZEC), and Dash. The EU will ban all cryptocurrencies intended to provide anonymity for transactions operating within its borders. Regulators claim that these coins enable users to conduct hidden criminal activities and money laundering schemes more easily.
The new legal framework imposes strict regulatory requirements, where transactions exceeding 1,000 euros will require full identity verification of participants, including both sender and receiver. By implementing this measure, traditional banking standards can be better applied to cryptocurrency transaction processes.
AMLA: New Cryptocurrency Regulatory Authority
To enforce these changes, the EU established the Anti-Money Laundering Agency (AMLA) as a new enforcement agency to regulate these changes.
AMLA is responsible for overseeing about 40 regulated cryptocurrency service providers operating with six or more EU member states.
Under the legal authority of AMLA, these companies must maintain 20,000 registered users or exceed 50 million euros in annual transactions.
EU Leads in Crackdown on Anonymous Cryptocurrency
The EU has implemented a ban on anonymous accounts and private cryptocurrencies as members seek to prevent cryptocurrencies from facilitating illegal activities.
These regulations will now require cryptocurrency service providers to rebuild their systems while enforcing strict customer identification verification (KYC) requirements for compliance.