#EUPrivacyCoinBan A central component of the new EU legislative package to combat financial crime is the Anti-Money Laundering Regulation (AMLR), officially published in the Official Journal of the EU in June 2024.

Implications of the AMLR for Privacy Coins and Anonymity in Crypto:

Ban on Services Involving Anonymity: Under the AMLR, regulated entities—such as banks, financial institutions, and crypto-asset service providers (CASPs), including cryptocurrency exchanges—are prohibited from:

Offering anonymous crypto accounts or wallets: All accounts and wallets with regulated providers must undergo identity verification (KYC – Know Your Customer).

Dealing in anonymity-enhancing cryptocurrencies (privacy coins): Regulated providers are barred from holding or facilitating transactions involving coins designed to obscure user identities, such as Monero, Zcash, and Dash.

Purpose: These restrictions aim to enhance transparency and traceability in crypto transactions, reducing the risk of misuse for money laundering, terrorist financing, and other illicit activities.

Implementation Timeline: While various elements of the AML/CFT framework and the Markets in Crypto-Assets (MiCA) regulation will be phased in starting late 2024, the specific ban on anonymous accounts and privacy coins for CASPs is expected to take effect in 2027, with some sources indicating a start date of July 1, 2027.

Oversight: Enforcement will be led by the newly established EU Anti-Money Laundering Authority (AMLA), headquartered in Frankfurt. This authority will have direct supervisory power over certain major financial institutions and CASPs.