A sweeping European Union regulation finalized in 2024 will effectively ban the use of privacy-focused cryptocurrencies like Monero (XMR) by crypto service providers starting July 10, 2027, according to the European Crypto Initiative (EUCI). The move is part of a broader crackdown under Regulation 2024/1624 aimed at curbing money laundering and terrorist financing within the financial system.
The legislation, introduced by the European Parliament and now adopted, marks the first time the EU has targeted privacy coins directly, citing their inherent anonymity as a barrier to effective anti-money laundering (AML) enforcement. The regulation prohibits exchanges and custodial wallet providers from offering services that involve privacy-enhancing coins or mixers, which obscure transaction trails.
“Anonymous crypto-asset accounts—like other anonymizing instruments—do not allow for tracing of crypto-asset transfers,” the EUCI explained. “This poses a significant risk of abuse for criminal purposes.”
While privacy coins are designed to protect financial privacy by unlinking transactions, the EU sees this as incompatible with AML compliance. Under the new rules, exchanges will not be allowed to facilitate trades involving coins with enhanced anonymity, nor use technologies that obscure customer transactions.
However, the ban does not extend to individual users or developers of non-custodial wallets. Those using or holding Monero via self-hosted wallets or hardware wallets remain unaffected, making the restriction a partial ban focused on regulated intermediaries rather than end users.
To oversee the implementation, a new European Anti-Money Laundering Agency (AMLA) will be established in Frankfurt by July 1, 2025. The AMLA will issue concrete guidelines for service providers by the time the law takes effect in 2027. These will also cover shell companies, self-hosted wallets, and interactions with crypto service providers in countries with weaker AML standards.
Although most major exchanges have already delisted Monero and similar coins, the regulation formalizes and tightens compliance requirements. For crypto businesses, this likely means increased due diligence and verification duties—but potentially greater regulatory clarity through centralized oversight.
