EU to Ban Privacy-Focused Tokens and Anonymous Crypto Accounts by 2027

The European Union (EU) plans to ban privacy-focused tokens and anonymous crypto accounts in 2027 as part of new anti-money laundering rules under the Anti-Money Laundering Regulation (AMLR).

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— European Crypto Initiative (@EuCInitiative) April 23, 2025

For context, privacy tokens are digital assets that shield transaction details, including sender, receiver, and amount. Unlike Bitcoin (BTC) or Ether (ETH), which offer public ledgers, these tokens use advanced cryptographic methods to enable private, untraceable transactions.

While these features enhance user privacy, regulators argue they pose serious risks for illicit finance.

EU to Ban Privacy-Focused Tokens

According to Article 79 of the AMLR, banks, financial institutions, and crypto-asset service providers (CASPs) will be prohibited from offering anonymous accounts or handling privacy coins.

The European Crypto Initiative (EUCI) confirmed that the legal language bans these services outright.

“Credit institutions, financial institutions, and crypto-asset service providers are prohibited from maintaining anonymous accounts.”

In addition, a new Anti-Money Laundering Authority (AMLA) will be created to supervise major CASPs operating in at least six EU countries. AMLA will directly monitor 40 companies, starting with those with over 20,000 users in one country or handling more than 50 million euros (approximately $56.48 million) annually.

Moreover, the rules introduce strict customer verification requirements for crypto transfers over 1,000 euros (roughly $1,129).

Potential Implications

If implemented, the EU ban could force exchanges to delist privacy coins, reduce liquidity, and significantly limit access for European users.

Analysts warn that long-term adoption of privacy tokens may decline, while short-term volatility will likely persist amid regulatory uncertainty.

News of the planned ban has triggered market reaction. Shortly after the news broke out on X, popular privacy tokens like Monero (XMR) and Zcash (ZEC) fell 8% and 7%, respectively, before recovering most losses.

Moreover, on-chain data showed a sharp increase in Monero transactions, indicating panic selling and fund withdrawals from exchanges.

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