The bill must be approved by the finance ministers of the bloc’s member states for it to take effect

European Parliament has approved a ban on mixers and anonymous cryptocurrencies

25.04.2024 - 12:55

215

3 min

Last updated on Aug 5, 2024

What’s new? The European Parliament has given final approval to an anti-money laundering regulation. It will oblige crypto firms to collect more data on users and their transactions, increase monitoring of non-custodial wallets, and abandon privacy-enhancing tools such as crypto mixers and anonymous cryptocurrencies.

Material by DL News

What else is known? The regulation is part of a wider package of measures updating the EU’s approach to combating money laundering, the Anti-Money Laundering Regulation (AMLR). It affects financial and credit institutions as well as crypto service providers in the 27-country bloc, tightening requirements for collecting customer identification data.

Under the regulation, from 2026, the Anti-Money Laundering Authority (AMLA), a new EU agency in Frankfurt, will oversee compliance with anti-money laundering and counter-terrorist financing laws and directly monitor the most at-risk institutions. However, the regulation must also be approved by the finance ministers of EU member states to take effect.

EU regulator says risks of high concentration in crypto market

EU regulator says risks of high concentration in crypto market

According to an ESMA report, 90% of crypto trading is accounted for by 10 exchanges

Read more

Crypto service providers will be required to identify and verify users, track transactions, and request additional information about senders and receivers. The requirement also affects non-custodial wallets that give users full and sole control over funds. The ruling refers to such services as “self-hosted wallets.”

The ruling will not affect vendors that develop software for non-custodial wallets, such as MetaMask.

An earlier version of the bill also included restrictions on the funds that vendors could accept from non-custodial wallets, but these were not included in the final version due to industry lobbying efforts.

The bill also bans tools that provide anonymity. Thus, crypto services will not be able to offer anonymous cryptocurrencies such as Monero (XMR) and Zcash (ZEC) to users in the EU.

Kraken will delist the anonymous currency Monero in Ireland and Belgium

Kraken will delist the anonymous currency Monero in Ireland and Belgium

Full support for the asset will cease on the platform on June 10

Read more

It is also prohibited to offer cryptocurrency mixing services aimed at hiding the transaction history and origin of assets.

In addition, users will be required to undergo a basic identification procedure (KYC) for crypto transfers up to 1000 EUR. For transactions above this amount, crypto firms will be forced to apply customer due diligence measures. Notably, under the same measures, anonymous cash payments are possible for up to 10 000 EUR.

Subscribe to Getblock Magazine and stay up to date with the latest news from the world of cryptocurrencies and the digital economy