Privacy Coins and EU Anti-Money-Laundering Law: An Assessment of the Ban From July 2027

Anyone holding Monero, Zcash or Dash at a European trading platform has been running into headlines about an imminent EU ban on privacy coins for months. This piece is an assessment and not a news report. What is documented is the wording of an EU regulation together with its date of application, and one recorded case from 2024 in which a large trading platform forcibly converted Monero holdings. Everything that follows from this for individual coins and providers is assessment. The two are kept apart here.

The documented core fits into two sentences. Article 79 of the European Union's anti-money-laundering regulation prohibits certain companies from keeping accounts that obscure the holder or the transactions, and it names anonymity-enhancing cryptocurrencies explicitly in doing so. The regulation becomes applicable on 10 July 2027. No reason to hurry follows from that, but there is reason to check where your holdings sit and what would happen to them if the platform holding them reshapes its range.

Article 79 of the EU anti-money-laundering regulation: what the wording says

The relevant provision is Article 79(1) of Regulation (EU) 2024/1624, adopted on 31 May 2024. It sits in Chapter VIII, formally headed "Measures to mitigate risks deriving from anonymous instruments". The first sentence reads:

"Credit institutions, financial institutions and crypto-asset service providers shall be prohibited from keeping anonymous bank and payment accounts, anonymous passbooks, anonymous safe-deposit boxes or anonymous crypto-asset accounts as well as any account otherwise allowing for the anonymisation of the customer account holder or the anonymisation or increased obfuscation of transactions, including through anonymity-enhancing coins."

Two observations matter in practice. First, the sentence addresses companies and not you as an investor: what is prohibited is the keeping of certain accounts, and the addressees are credit institutions, financial institutions and crypto-asset service providers. Second, the provision attaches to an effect and not to a product name. What is barred are accounts that permit anonymisation or obfuscation "to a high degree"; anonymity-enhancing cryptocurrencies are named as one route to that end.

The second sentence covers existing holdings: where anonymous accounts already exist, due diligence measures must be applied to holders and beneficiaries before any further use. That the same article also clears away bearer shares in paragraph 3 shows the thrust of it.

Application from 10 July 2027: the timetable of Regulation (EU) 2024/1624

The final provision is unambiguous. The regulation "shall apply from 10 July 2027", with an exception for a narrowly drawn group of obliged entities for which application is set at 10 July 2029. The text is binding in its entirety and directly applicable in every member state, so it needs no German implementing act.

That leaves just under eleven months. Individual platforms are likely to react earlier: anyone wanting to be compliant on the deadline does not rebuild their range the night before.

Crypto-asset service providers: who the provision addresses

The anti-money-laundering regulation uses the term "crypto-asset service provider" in the meaning it already carries in European crypto law. What is meant are authorised service providers offering trading, custody, exchange or intermediation of crypto assets on a commercial basis. That covers the regulated platforms where most investors actually keep their holdings, including the providers in our overview of regulated crypto exchanges.

Not addressed is software you run yourself, or networks that belong to nobody. A wallet on your device keeps no customer account for you, and a public protocol has no operator on whom a supervisor could impose anything. What is regulated is the route of access, not the technology behind it.

Anonymity-enhancing cryptocurrencies: why the wording contains no list of coins

Not a single token name appears in the regulation. There is no annex, no official list and no register of affected crypto assets. The text works with a description that supervisors and companies have to apply to specific crypto assets.

This is where the realm of assessment begins, and it is expressly marked as such here. It stands to reason that a crypto asset falls under the description the harder it is to reconstruct sender, recipient and amount from the public data. Crypto assets offering a choice between open and shielded transfers may have to be judged differently from those where the obfuscation always applies. None of these classifications is documented; none appears in any official document that could be checked for this piece.

The Kraken precedent of 2024: how a forced conversion of Monero unfolded

On the question of what happens in practice, nobody has to speculate: there is a documented sequence that the platform concerned published itself. Kraken removed Monero from its range in the European Economic Area and set out the process on a help page on Monero support in Europe that is still available today, last updated on 31 March 2025.

On 31 October 2024 at 15:00 UTC, trading and deposits were halted for all Monero markets and open orders were closed. Withdrawals remained possible until 31 December 2024 at 15:00 UTC. For anyone still holding the asset after that, the Monero was automatically converted into Bitcoin at the market rate; distribution to the accounts concerned was completed by 6 January 2025.

Two months lay between the end of trading and the end of the withdrawal window. Anyone who did nothing lost no money, but the platform made the decision about which crypto asset the value would end up in. Our guide on what to do when a crypto exchange shuts down describes how to recognise a credible announcement.

Why this case carries more weight than any forecast

The episode predates the anti-money-laundering regulation and was not justified by reference to it. It is therefore no evidence of the future legal position, though it does show the mechanics a platform chooses in a case like this.

Forced conversion and Section 23 of the German Income Tax Act: why a forced sale is a sale for tax purposes

Here lies the point many discussions overlook: a conversion triggered by the platform is not a neutral event for tax. Under Section 23 of the German Income Tax Act, private disposal transactions include "disposal transactions involving other assets where the period between acquisition and disposal does not exceed one year". Whether you trigger the sale yourself or a provider carries it out after a deadline passes makes no difference to that.

In practice this means: if the acquisition lies less than a year back, the conversion is taxable, and the gain counts in the calendar year of the conversion. Under paragraph 3, gains remain tax-free where the total gain from private disposal transactions in the calendar year came to less than 1,000 euros. That exemption threshold applies to all private disposal transactions together and not per crypto asset.

The decisive factor is the loss of control over timing: anyone who lets the conversion happen can no longer choose the more favourable moment for tax, such as waiting for the one-year period to run out. No statement about the amount of tax can be made here, because it depends on the acquisition date, the acquisition cost and the other private disposal transactions of the year.

Travel Rule and MiCA: why Article 79 does not stand alone

The anti-money-laundering regulation is the most recent building block and not the only one. Regulation (EU) 2023/1113 "on information accompanying transfers of funds and certain crypto-assets" already requires certain details to accompany a transfer. According to its recitals it applies from the date of application of the European crypto-asset regulation, in step therefore with the rulebook under which the platforms hold their authorisation.

For crypto assets whose transfers cannot be attributed technically, this creates a tension that exists today already and into which earlier delistings fit. Whether the transmission obligation, the authorisation requirements or a commercial decision tipped the balance cannot be established from the outside.

Self-custody as a way out: what a wallet of your own does and does not do

Anyone wanting to keep a crypto asset independently of a platform's decision cannot avoid holding it themselves. The reason is in the wording: what is prohibited is the keeping of accounts by companies, and a holding on a device in your hand is not such an account. Our hardware wallet comparison shows which classes of device come into question.

This solution has limits. Self-custody shifts the risk from the platform to you: losing the recovery words means losing the holding, with no complaints desk and no reversal. It also solves only the custody part. For a later exchange into euros you need a service provider again, and whether a regulated provider will still offer that is precisely the open question of this piece.

Between doing nothing and full self-custody lies a third option: converting the holding at a moment of your own choosing into something the question does not touch. That is no recommendation for any particular crypto asset, only a reminder that the decision is still yours to make.

Holding stays permitted: what the regulation does not govern

The wording addresses credit institutions, financial institutions and crypto-asset service providers. Article 79 contains no provision barring private individuals from holding a particular crypto asset, and no such rule could be found elsewhere in the regulation either. Anyone holding Monero or Zcash in a self-managed wallet is not directly affected by a prohibition on companies keeping accounts.

What is governed is regulated access, meaning trading, custody and exchange at authorised companies. For the vast majority of investors that access is the only one they use, which is why the practical effect turns out considerably larger than the company-only circle of addressees suggests.

Open questions of interpretation until 2027: where this text remains assessment

On these points the piece deliberately makes no statement of fact.

• Which crypto assets supervisors will classify as anonymity-enhancing is open. No official list exists.
• Whether crypto assets with optional shielding will be treated differently from those with continuous obfuscation has not been decided so far.
• When individual providers will react cannot be foreseen. The date of application is a latest point in time, not a provider announcement.
• How individual platforms would wind down residual holdings is open. The 2024 case is an example, not a rule.

Documented, by contrast, are the wording of Article 79(1), the application date of 10 July 2027, the course of the Monero forced conversion in the winter of 2024, and the treatment under Section 23 of the German Income Tax Act.

Checking privacy coins: what to take away

A deadline just under eleven months away calls for no panic, but it does call for a stocktake. These steps can be done today and spare you the time pressure under which decisions rarely get better.

1. Check where your holdings actually sit. Look at whether you hold crypto assets built for obfuscation, and at which provider they sit. Only a holding at an authorised service provider is affected. If you want to part with them anyway, our overview of selling crypto assets sets out the routes.
2. Sort out your acquisition data before somebody else picks the moment. The acquisition date of each individual position is what counts for the one-year period. Anyone who has it to hand can calculate rather than search when it matters. Our comparison of crypto tax software and portfolio trackers sets out the tools.
3. Decide on custody deliberately. Anyone wanting to hold an affected crypto asset for the long term is better off preparing self-custody than improvising it under deadline pressure. Which solutions come into question is covered in our software wallet comparison.

Nothing about this situation forces you into a transaction today. What is called for is an overview, so that the decision belongs to you and not to a provider's calendar.

(As of August 16, 2026. This article is not investment advice. Prices and fee structures change; check the terms with the provider before you buy.)