EU’s Anti-Money Laundering Regulation Is Not a Ban on Anonymous Crypto Wallets
Contrary to recent reports, the European Union has not banned anonymous cryptocurrency wallets and transactions under its new anti-money laundering regulation.
Patrick Hansen, the EU Director of Strategy at crypto firm Circle, recently took to the social media platform X to clarify the widespread claims about an outright prohibition on anonymous crypto accounts.
Hansen, who previously worked on EU policy issues, wrote that the fresh anti-money laundering regulation (AMLR) is “not a crypto regulation” but a broad framework applicable to all financial institutions, including crypto-asset service providers (CASPs) like exchanges and brokers.
The AMLR (read the full text here) does not ban self-custody wallets or peer-to-peer transfers of cryptocurrencies. He clarified that the regulation impacts only “obliged entities” like CASPs that must follow standard Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures. Providers of self-custody wallets without control over user assets are exempt.
While he acknowledged paying merchants directly from non-KYC wallets could become difficult under the new rules, he stressed individuals can still use self-custody wallets for purchases and services within the EU without restrictions. Hansen writes that the regulation largely maintains existing AML guidelines for CASPs, having a “very limited, almost zero” impact on the crypto sector.
The AMLR, part of a package that includes the Markets in Crypto Assets (MiCA) regulation prohibiting anonymous crypto listings, contains provisions allowing use of anonymous wallets — contrary to circulating rumors of a ban.
Hansen affirmed these measures align with present practices, concluding the EU’s AML law introduces “nothing new” for cryptocurrencies.
He also said that the AMLR now awaits final approval in the European Parliament, which would most likely be at the end of April, and in the Council of the EU. The new regulations would then enter into application by summer 2027, or three years after publication.
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