The European Union is about to launch the Anti-Money Laundering Regulation (AMLR). This multilayered international framework intends to make it difficult for bad actors to launder money and finance terrorism. With this agreement, these institutions will be prohibited from holding anonymous accounts by this regulation crypto asset service providers (CASPs). It further bars them from even dealing in privacy-preserving crypto assets Monero (XMR) and Zcash (ZEC). The phase in to allow for direct supervision under the AMLR is set to start on July 1, 2027.
The AMLR is part of a broader initiative that includes bank and payment accounts, passbooks, safe-deposit boxes, "crypto-asset accounts allowing anonymisation of transactions," and "accounts using anonymity-enhancing coins." Article 79 of the AMLR clearly lays out strict prohibitions against anonymous accounts.
According to the European Crypto Initiative (EUCI), the AMLR prohibits credit institutions, financial institutions, and CASPs from maintaining anonymous accounts. Vyara Savova, senior policy lead at the EUCI, walked us through the AMLR, highlighting how it will affect different sectors.
The AMLR will employ "materiality thresholds" to ensure direct supervision focuses on firms with a "substantial operations presence in multiple jurisdictions." Those crypto asset service providers operating in at least six member states will legally be placed under direct anti-money laundering supervision.
The regulation sets specific thresholds for direct supervision, including a "minimum of 20,000 customers residing in the host member state" or a total transaction volume exceeding 50 million euros ($56 million). In addition, the AMLR requires enhanced customer due diligence for transactions over 1,000 euros ($1,100).
The AMLR is a sweeping legislative framework that radically affects the entire industry landscape for crypto asset service providers. Most importantly, it extends to credit unions and banks. It applies across all sectors, such as banking, payments, and crypto-assets, further strengthening the EU’s AML/CFT framework.
The EUCI recently released the AML Handbook — an expanded look at what specifics of the AMLR mean for shippers, carriers, and ports. The implementation of the AMLR is expected to significantly enhance the EU's efforts to combat money laundering and terrorist financing.
