The European Union (EU) is set to utilize its Anti-Money Laundering Regulations (AMLR) to ban privacy cryptocurrencies (privacy coins) and anonymous crypto accounts by the year 2027. Observers interpret this as a specific implementation within the Markets in Crypto-Assets (MiCA) regulation.
The European Crypto Initiative (EUCI) recently released its “AML Handbook,” which focuses on how the AMLR obligations will affect crypto-asset service providers (CASPs), as well as financial and credit institutions. Article 79 of the AMLR outlines a strict prohibition on handling anonymous accounts.
Significant changes to this framework are considered unlikely, with any potential adjustments expected to be superficial. The European Banking Authority (EBA) will play a crucial role in the implementation and the creation of delegated acts, indicating that certain details for the complete harmonization of CASPs still need to be defined.
Once the rules are officially finalized, CASPs with “substantial” operations in at least six EU member states will be subject to direct AMLR supervision. Starting July 1, 2027, at least 40 firms (one per EU member state) are slated for direct supervision. “Substantial” operational ability is defined as having at least 20,000 customers in a member state or a transaction volume of $56 million or more.
Furthermore, customer due diligence will be required for all transactions exceeding the euro equivalent of $1,100.
The primary rationale behind this policy is the assessment that Decentralized Finance (DeFi) platforms have emerged as potential avenues for criminal activities, particularly for money laundering from crypto to fiat currencies. This perspective exists despite the fact that the actual level of money laundering via cryptocurrencies is considered negligible compared to fiat currencies and necessitates significantly more involvement from illicit actors.
[newsletter_form lists="1"]
