Europe Cracks Down on Anonymous Cryptocurrency Transactions with New Anti-Money Laundering Regulations

By 2027, banks, financial institutions, and crypto service providers will no longer be allowed to support transactions involving privacy coins

The European Union is introducing new anti-money laundering regulations that will effectively ban anonymous cryptocurrency transactions by 2027, putting an end to transactions via privacy coins like Monero (XMR), Zcash (ZEC), and Dash (DASH).

As reported by the European Crypto Initiative, the new ruleset will require financial institutions to implement stricter due diligence processes. These firms will now be required to regularly update verification data, according to the report.

Furthermore, financial institutions will need to assess the risk of transactions and effectively terminate any relationships that pose a threat to financial security, the report explained.

Another major shift involves self-hosted wallets, which will face tighter monitoring under the new regulations. Crypto providers must identify and verify senders and recipients, the report stated.

Moreover, they will be tasked with collecting additional details about fund movements and maintaining constant oversight to prevent illicit activities, according to the report.

The EU is also planning to block financial institutions from dealing with shell companies, ensuring that unregistered entities won’t have access to regulated crypto services, the report noted.

Additionally, firms must vet third-country financial institutions before entering business partnerships, with the Anti-Money Laundering Authority (AMLA) set to issue final guidelines by July 2027, according to the report.

The introduction of these changes aligns the EU with global trends in crypto regulation, the report concluded. Digital asset firms will need to prepare for stricter compliance measures before the 2027 deadline.