The European Union has completed the preparation of new legislation aimed at combating money laundering (AML), which will provide new opportunities for monitoring the cryptocurrency market. According to the updated rules, which will come into effect in 2027, the circulation of anonymous cryptocurrencies, such as Monero (XMR) and Zcash (ZEC), will be prohibited on platforms regulated under MiCA.
This is reported by Finway
Key Elements of the New Rules
The main provisions of the new legislation include:
- Ban on Anonymous Cryptocurrencies: Cryptocurrency service providers, including exchanges, wallets, and DeFi protocols, will be required to refrain from processing transactions involving coins that use privacy technologies, such as zk-SNARKs or ring signatures.
- Ban on Anonymization: Any services or technologies that allow for the concealment of transaction information or participants will also be subject to the ban, including mixers and obfuscation protocols.
- Enhanced Identification: For transactions exceeding 1,000 euros, all platforms will be required to perform mandatory identity verification, regardless of who is making the transfer.
“These measures are aimed at preventing the use of cryptocurrencies for financing criminal activities, including terrorism, human trafficking, and tax evasion,” the document’s explanation states.
Functions and Responsibilities of the New Authority
To ensure compliance with these rules, a special EU authority for combating money laundering (AMLA) will be established, which will begin operations in 2024. By July 10, 2026, AMLA is required to publish technical standards for high-risk sectors, threshold values for transactions requiring enhanced scrutiny, as well as criteria for identifying one-off and related transactions.
Additionally, by July 10, 2027, the authority will provide guidelines for assessing the reliability of counterparties and risk management requirements for crypto services. AMLA will also gain the authority to conduct direct supervision of cryptocurrency service providers in at least six EU countries.
The first wave of direct supervision, which will begin before July 1, 2027, will include a maximum of 40 companies based on criteria such as having at least 20,000 clients or transaction volumes exceeding 50 million euros.
Such innovations will contribute to creating a safer environment for users of cryptocurrency services in the EU.