#EUPrivacyCoinBan

The European Union has implemented stringent regulations targeting privacy-focused cryptocurrencies, aiming to enhance transparency and combat illicit financial activities.

Key Regulatory Measures

1. Markets in Crypto-Assets (MiCA) Regulation: MiCA, the EU’s comprehensive crypto regulation framework, mandates that crypto-asset service providers (CASPs) adhere to Know Your Customer (KYC) and Anti-Money Laundering (AML) protocols. This includes collecting and verifying user information, thereby limiting the use of privacy coins like Monero (XMR) and Zcash (ZEC) that obscure transaction details.

2. Anti-Money Laundering Regulation (AMLR): Complementing MiCA, the AMLR prohibits CASPs from offering services to anonymous users or facilitating transactions involving privacy coins. While peer-to-peer (P2P) transactions and self-custody wallets remain legal, CASPs must implement risk mitigation measures, such as verifying the identities of users involved in transfers between their platforms and self-hosted wallets.

3. Transfer of Funds Regulation (TFR): Aligned with the Financial Action Task Force’s (FATF) “travel rule,” the TFR requires CASPs to collect and share information about the sender and recipient of crypto transfers, further limiting the anonymity that privacy coins provide.