EU Plans Privacy Coin and Anonymous Wallet Ban by 2027

EU plans to prohibit privacy coins and pseudonym crypto wallets by 2027 under AMLR. Crypto asset service providers face new rules to ensure transparency. AMLR prohibits anonymized transactions and privacy-focused cryptocurrencies. Beginning in 2027, the European Union plans to outlaw pseudonym cryptocurrency accounts and safeguarding confidentiality coins.The measures are supposed to be an increase in oversight in the crypto sector and are part of the new Anti Money Laundering Regulation (AMLR). Financial institutions, credit entities, and crypto asset service providers (CASPs) will be prohibited from managing anonymous accounts and supporting privacy-focused cryptocurrencies such as Monero and Zcash. The aim of this is to make digital transactions more transparent in an effort to help fight financial crimes. In response to these changes, the European Crypto Initiative (EUCI) has released a comprehensive guide “The AML Handbook” to help cryptocurrency businesses understand and comply with the new rules. It specifies what CASPs have to undertake to guarantee AMLR compliance; how it influences EU-based CASPs. Crypto Anonymity is Targeted in New AML Rules The AMLR contains a far reaching framework that makes tools and accounts to obscure transaction details illegal. This includes crypto accounts that allow for anonymized transactions and coins created with the privacy improvement in mind. The regulation covers not only cryptocurrencies but also includes anonymous bank accounts, payment systems, and safe deposit boxes. Under the new rules, CASPs will be under heightened scrutiny. The Anti Money Laundering Authority (AMLA) will directly supervise those operating across at least six member states of the EU. EUCI’s AML Handbook shows that AMLA will cover 40 entities, with at least one from each member state, from July 1, 2027. It aligns well with global initiatives that combat funding for terrorist organizations and illicit financial transactions. The bloc aimed to shut loopholes that illicit activities could exploit through privacy-focused tools. Crypto Businesses Prepare for Compliance Challenges Crypto businesses have a lot of work to do in order to meet the AMLR’s extensive requirements. According to EUCI’s handbook, the regulation extends existing AML obligations to CASPs, a term in the Markets in Crypto-Assets (MiCA) framework. However, this means that companies must implement stringent measures to verify their customers’ identities and monitor transactions. Failure to comply would be an expensive exercise with substantial financial penalties, which would see businesses focus on regulatory compliance. The handbook provides a complete reference site, bringing together AML rules applicable to the crypto industry, and does not include the Transfer of Funds Regulation (TFR), which is addressed by EUCI separately. The focus on CASPs by the EU is a response to the expanding role of cryptocurrencies in the financial ecosystem. The bloc enforces these rules to strike a balance between innovation and security, with the crypto sector having to play by the same rules as the rest of the financial world. Source: https://www.livebitcoinnews.com/eu-plans-privacy-coin-and-anonymous-wallet-ban-by-2027/