The European Union (EU) moves forward in its mission to limit financial crimes by revealing an Anti-Money Laundering (AML) legislative package in 2024. It aims to synchronize AML efforts across its member states. With growing concerns about illicit activities linked to digital assets, the bloc’s fresh regulations target not only traditional finance but also the increasingly influential crypto sector.
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Who’s Now Under Watch
At the heart of this reform is the Anti-Money Laundering Regulation (AMLR), designated as Regulation (EU) 2024/1624. This regulation brings a much broader range of businesses under direct scrutiny. For the first time, all crypto-asset service providers are included alongside crowdfunding platforms, mortgage and consumer credit intermediaries, investment migration operators, non-financial mixed-activity holding companies, and even football agents and clubs.
Additionally, an EU-wide cap has been set on cash transactions, now limited to €10,000. High-value dealings, particularly those with perceived risks, must undergo enhanced due diligence, ensuring every detail is reviewed to prevent illegal activities.
Complementing the AMLR is the 6th Anti-Money Laundering Directive (AMLD6), Directive (EU) 2024/1640. It demands that each member state complete a national risk assessment every four years, implement centralized registers for bank accounts, and strengthen protections for whistleblowers. Notably, anyone convicted of severe money laundering offenses will face a minimum of four years in prison.
Direct Oversight of High-Risk Finance by 2025
Central to this legislative drive is the formation of the Anti-Money Laundering Authority (AMLA), as laid out in Regulation (EU) 2024/1620. Headquartered in Frankfurt, AMLA is set to become fully operational by July 1, 2025. This agency has been granted direct supervisory powers over high-risk financial institutions and will work closely with national supervisory authorities and Financial Intelligence Units (FIUs).
Beyond overseeing firms, AMLA will also issue technical standards and regulatory guidelines to ensure uniformity in applying AML rules across all EU states. Its influence extends to crypto-asset firms operating across borders, reinforcing strict compliance demands.
Another significant update is the Regulation on Information Accompanying Transfers of Funds and Certain Crypto-Assets, Regulation (EU) 2023/1113. From December 30, 2024, it mandates crypto service providers to collect and share data about the sender and receiver of every transaction, a move that directly strengthens traceability in the digital currency landscape.
Privacy Coins Face Total Ban
Perhaps the most headline-grabbing feature of this legislative wave is the firm stance against privacy-focused cryptocurrencies. The EU will ban privacy-preserving tokens and anonymous cryptocurrency accounts starting in 2027. The AMLR specifically targets coins that enable anonymous transactions, such as Monero and Zcash. According to the AML Handbook by the European Crypto Initiative (EUCI):
“Article 79 of the AMLR establishes strict prohibitions on anonymous accounts […]. Credit institutions, financial institutions, and crypto-asset service providers are prohibited from maintaining anonymous accounts.”
This prohibition doesn’t only apply to typical crypto accounts but extends to bank and payment accounts, passbooks, safe-deposit boxes, and any crypto-asset accounts that allow transaction anonymization. The rules aim to shut down any channels that could obscure the origin or destination of funds.
Vyara Savova, senior policy lead at EUCI, explained the current state of play:
“The regulations (the AMLR, AMLD and AMLAR) are final, and what remains is the ‘fine print’ – aka the interpretation of some of the requirements through the so-called implementing and delegated acts.”
She also noted that these technical aspects are primarily being handled by the European Banking Authority, which is gathering public feedback before finalizing them.
Read also: Everything You Need to Know About the Digital Euro
How Privacy Coins Could Be Squeezed Out
Privacy-focused cryptocurrencies, once seen as safe havens for those seeking transaction confidentiality, now face a shrinking space within the EU’s borders. The AMLR ban effectively sidelines them from any legitimate financial service. Credit institutions and crypto service providers will no longer be able to facilitate transactions involving these coins.
Centralized crypto projects, or Crypto Asset Service Providers (CASPs), must reevaluate internal processes and prepare for the looming ban. Savova underscored the urgency of this shift:
“Centralized crypto projects (CASPs under MiCA) need to keep it in mind when determining their internal processes and policies.”
Tighter Rules Ahead?
Looking ahead, the EU plans to ramp up direct supervision of crypto service providers, especially those with operations in multiple member states. Starting July 1, 2027, AMLA will begin selecting 40 entities for direct supervision, ensuring at least one from each member state is under its watchful eye.
According to EUCI’s AML Handbook, these selections will be based on specific thresholds, including firms with a minimum of 20,000 customers in a host country or those handling transaction volumes above €50 million.
In addition, any transactions over €1,000 will trigger mandatory customer due diligence procedures, tightening controls over financial flows and leaving little room for loopholes.
Read also: What is Monero (XMR)? Here’s All You Need to Know
