EU to Ban Privacy Tokens and Anonymous Crypto Accounts Starting in 2027

On April 24, 2025, the European Union officially passed a new Anti-Money Laundering Regulation (AMLR), marking a decisive stance against financial anonymity in the digital asset sector. The regulation includes a complete ban on privacy coins such as Monero (XMR), Zcash (ZEC), and Dash, as well as anonymous crypto accounts, effective July 1, 2027.

This move represents a significant shift in crypto policy in Europe, aligning digital assets more closely with traditional finance and transparency standards.

EU to Ban Privacy Tokens and Anonymous Crypto Accounts Starting in 2027

🔍 Key Highlights of the AMLR

Under Article 79 of the AMLR, the following provisions will be enforced:

❌ Bans on anonymous crypto accounts: Crypto service providers will no longer be allowed to offer or maintain anonymous wallets or accounts.

🔒 Prohibition of privacy-enhancing tokens: Tokens that utilize privacy features to obscure transaction history or wallet addresses will be banned from being offered or processed by regulated entities.

🛑 Restrictions on privacy-enhancing services: This includes mixers, tumblers, and other tools designed to anonymize transactions.

Additionally, all crypto transactions exceeding €1,000 will require full Know Your Customer (KYC) checks for both senders and recipients—even when using self-hosted wallets.

Still figuring out what the AMLR means for your crypto business? We get it — it's dense, it's new, and it’s critical. That’s why we’ve put together “The AML Handbook”!

We break down what you need to know (and what you need to do) to stay compliant 👇https://t.co/XOt37M6MRh
— European Crypto Initiative (@EuCInitiative) April 23, 2025

🏛️ Supervision by the European Anti-Money Laundering Authority (AMLA)

To enforce AMLR, the EU will launch the European Anti-Money Laundering Authority (AMLA) in 2026. This entity will have direct supervisory powers over:

Crypto Asset Service Providers (CASPs) operating in at least 6 EU member states.

Platforms with over 20,000 users or annual crypto transaction volumes exceeding €50 million.

AMLA will set clear compliance standards and penalize violations, bringing crypto companies in line with traditional financial institutions.

🌐 Implications for the Crypto Industry

The EU’s anti-anonymity stance has broad implications for how crypto is used, stored, and traded within the region.

1. Delistings of Privacy Coins

Many centralized exchanges—including Binance, OKX, and Huobi—have already started delisting privacy coins in response to growing regulatory scrutiny. The new regulation is expected to accelerate this trend across the EU.

2. Increased KYC Requirements

All users operating within EU jurisdictions will need to undergo strict identity verification, even when interacting with decentralized protocols or wallets, if the transaction size crosses the €1,000 threshold.

3. Reduced Financial Privacy

Critics argue that the regulation erodes financial freedom and privacy, especially for vulnerable groups like activists, journalists, and citizens under authoritarian regimes.

4. Possible Migration of Projects

Privacy-focused blockchain projects and services may consider relocating to jurisdictions with more favorable crypto policies or shifting toward decentralized, non-custodial models that circumvent EU oversight.

💬 Mixed Reactions from the Community

Proponents of AMLR argue that it's a necessary step to bring crypto into the regulated financial ecosystem, reduce illicit activities, and increase trust among institutional players.

Opponents believe it undermines crypto’s core value proposition—privacy, decentralization, and user autonomy. Some compare it to imposing surveillance-level scrutiny on an inherently permissionless technology.

🧭 What Should Users and Businesses Do?

With the new rules coming into effect in 2027, individuals and crypto-related companies in the EU must begin preparing now. Key actions include:

Conducting audits to identify and phase out privacy coin usage.

Implementing full KYC/AML procedures for wallets, exchanges, and on/off-ramp services.

Exploring compliance solutions like zero-knowledge proof-based ID verification or regulated stablecoins.

📈 A Turning Point for Crypto in Europe

The AMLR is arguably the most aggressive piece of crypto regulation yet from the EU. While its goal is to curb criminal misuse of crypto, it could also reshape the Web3 landscape, forcing a shift from anonymous innovation toward compliant, regulated financial products.

The EU’s decision sends a clear message: the age of anonymity in European crypto markets is ending. Whether this leads to broader adoption or pushes users into underground ecosystems remains to be seen.