EU Plans Enhanced Crypto Transparency, Targets Anonymous Wallets

The European Union is planning to enhance transparency in cryptocurrency transactions by tracking transfers between both senders and receivers. This initiative was highlighted by Eurogroup President Paschal Donohoe, who also serves as Ireland’s Finance Minister, during his remarks at the European Anti-Financial Crime Summit 2025 in Dublin. The plan involves reclassifying performance transfer mechanisms to include data recording for both senders and recipients of funds, specifically targeting crypto asset service providers.

Donohoe emphasized the importance of broadening the scope of financial regulation to address transparency issues within the crypto space. He noted that the new EU anti-money laundering authority (AMLA) rule is a significant development aimed at creating a robust toolkit for tackling financial crimes. The regulation, adopted in May 2023, seeks to make crypto-assets more transparent and traceable. Additionally, the AML regulation will restrict crypto firms from interacting with anonymous wallets and privacy coins, effective July 1, 2027. Regulators will also block the IP addresses of non-compliant decentralized exchanges.

The new AMLR law, which was formally passed by the EU last year, applies to all crypto-asset service providers. Patrick Hansen, Circle’s EU Strategy and Policy Director, clarified that the framework is broad and applies to all financial institutions, including crypto firms. However, James Toledano, COO of unity Wallet, expressed concerns that the new EU AMLR rule risks undermining the ethos of decentralized finance (DeFi). He argued that these laws, which align with traditional banking standards, do not fit well with the decentralized structure of crypto. Toledano suggested that self-custodial crypto holders will find ways to circumvent these regulations, given the global nature of the crypto market.

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