EU’s Anti-Money Laundering Legislation and Blockchain Tensions
As the European Union advances its ambitious Anti-Money Laundering (AML) legislation, tensions are mounting between regulators and participants in the blockchain sector over the fate of privacy-focused cryptocurrencies and anonymous accounts. Starting in 2027, a new regulation will ban financial institutions, including credit institutions and crypto asset service providers (CASPs), from operating anonymous accounts or dealing with privacy-centric tokens like Monero, as reported by Cointelegraph in May.
Privacy and Regulatory Challenges
Anja Blaj, a legal consultant and policy expert from the European Crypto Initiative, highlighted the ongoing struggle to protect rights to privacy-preserving coins, describing it as a “constant battle” between industry players and regulatory bodies. In a recent discussion on Cointelegraph’s daily live X spaces show, she noted:
“States aim to exert control and ascertain the identities of individuals engaging in transactions, motivated by the need to combat crime and fraud. Our collective goal is to enforce societal policies effectively.”
The EU’s focus on strengthening regulatory oversight of the cryptocurrency market builds on the existing framework established by the Markets in Crypto-Assets Regulation (MiCA). Despite the AML measures nearing completion, experts believe there remains an opportunity for dialogue and potential adjustments before implementation takes effect. Blaj mentioned:
“Policymaking is an ongoing dialogue; even finalized regulations can be reassessed once they’re out. There are still avenues for discussions with regulators to determine how these laws will be enforced.”
While there may still be room for negotiation, Blaj cautioned that regulations regarding privacy-centric cryptocurrencies are becoming increasingly rigorous, as they clash with state objectives.
Concerns Over “Chat Control” Initiative
Adding to existing concerns, another EU initiative dubbed “Chat Control” is gaining traction. This proposal seeks to mandate that messaging platforms like WhatsApp and Telegram monitor all messages, images, and videos sent by users, including those secured with end-to-end encryption. While fifteen EU member states support this controversial bill, it requires representation from 65% of the EU population for adoption—a benchmark that has yet to be met, with Germany’s hesitance potentially playing a critical role in the outcome.
