During the European Anti-Financial Crime Summit 2025 in Dublin, Eurogroup President and Ireland’s Finance Minister, Paschal Donohoe, unveiled the EU’s plans to introduce stringent regulations aimed at increasing transparency in cryptocurrency transactions.
The proposed legislation includes key regulations that will require Crypto Asset Service Providers (CASPs) to gather and retain detailed information on both the sender and receiver of cryptocurrency transactions, aligning with traditional financial system practices.
In a significant move, the EU had previously passed the Transfer of Funds Regulation in May 2023, mandating comprehensive tracking of crypto asset transfers.
New Regulations Crack Down on Crypto Anonymity and Mandate Data Collection
Effective July 1, 2027, the EU will prohibit transactions involving anonymous wallets and privacy-centric cryptocurrencies like Monero (XMR) and Zcash (ZEC) under the new Anti-Money Laundering Regulation (AMLR). The objective is to close off avenues for illicit activities facilitated by untraceable digital assets.
The AMLR forms part of a broader anti-money laundering (AML) framework that encompasses various financial instruments such as bank accounts, payment accounts, passbooks, and safe deposit boxes.
Furthermore, the new regulations will subject CASPs operating in six or more EU member states to direct AML supervision and enable authorities to enforce IP blocks on non-compliant decentralized exchanges to ensure adherence to the new standards across the EU.
Industry Responses to AMLR Vary
Patrick Hansen, the EU Strategy and Policy Director at Circle, clarified that the AMLR is a comprehensive framework applicable to all financial institutions and not exclusively targeting the cryptocurrency sector. He emphasized that the regulations aim to enhance transparency rather than ban self-custodial wallets.
However, James Toledano, COO of Unity Wallet, expressed concerns that the new regulations could clash with the core principles of decentralized finance (DeFi). Despite this, he acknowledged that due to the global nature of cryptocurrencies, users may seek alternative channels to liquidate assets, potentially bypassing the restrictions.
In conclusion, the implementation of these regulations is poised to have significant implications for the cryptocurrency industry in the EU and could potentially influence global standards for digital asset transactions.
Disclaimer: This article is intended for informational and educational purposes only. It does not constitute financial advice or any form of advice. Coin Edition holds no liability for any losses resulting from the use of the content, products, or services mentioned. Readers are advised to exercise caution before making any decisions related to cryptocurrency transactions.