EU Attempted Ban on Anonymous Crypto Transfers

No, the European Union did not outlaw private wallets or anonymous peer-to-peer transfers. The final Anti-Money Laundering Regulation (AMLR, Regulation (EU) 2024/1624) and Transfer of Funds Regulation (TFR, Regulation (EU) 2023/1113) target regulated intermediaries, not citizens signing transactions from their own keys. Pure self-hosted wallet to self-hosted wallet payments remain fully uncapped, unreported, and outside the scope of the new law. What did change is the compliance burden on crypto-asset service providers (CASPs) whenever they interact with customer-controlled addresses.

This page explains the rules that actually made it into the EU Official Journal, the political fight that removed the proposed €1,000 cap, and the follow-up reviews privacy advocates should watch before 2027. Use it to correct viral claims about “self-custody bans” and to plan controls if you operate an exchange, OTC desk, or payment gateway serving EU residents.

Final AMLR & TFR Requirements (2024–2027)

The AMLR was adopted in May 2024 and becomes applicable on 10 July 2027. The companion TFR, which extends the FATF “Travel Rule” to crypto, has applied since 30 December 2024. Together they set a predictable baseline: compliance lives with CASPs, not with private users. Key obligations include the €1,000 customer due-diligence trigger for occasional transactions, mandatory ownership verification when a customer withdraws to or deposits from a self-hosted address worth €1,000 or more, and the ongoing prohibition on anonymous accounts at exchanges. Article 79 of the AMLR explicitly carves out hardware/software wallet vendors and users, clarifying that self-custody tools are not considered obliged entities.

The best way to visualise these rules is to split flows. CASP↔CASP transfers must contain the full originator/beneficiary data required by the Travel Rule. CASP↔self-hosted transfers over €1,000 require the CASP to collect that same data, verify wallet ownership (typically by a signed message or small deposit), and keep records for supervisors. Self-hosted↔self-hosted transfers have no cap, no KYC requirement, and no reporting obligation. Exchanges that already run screening via the BitMixList AML Checker or similar tools simply need to document how they flagged suspect UTXOs before processing customer requests.

How the €1,000 P2P Cap Was Dropped

The confusion stems from late-stage Parliament amendments during the ECON/LIBE sessions in March 2024. Draft language proposed banning “anonymous crypto-asset transfers” above €1,000 unless both the originator and beneficiary were verified, a clause that would have equated self-hosted wallets with unlicensed cash couriers. On 28 March the compromise text briefly carried that limit, triggering headlines and panicked posts about an EU self-custody ban. Over the next two weeks, civil-society groups, wallet developers, and CASPs warned lawmakers that enforcement would be impossible and that even euro banknotes enjoy higher anonymity allowances.

During trilogue clean-up in early April 2024, negotiators removed the cap before the plenary vote. The final regulation settled on CASP-focused thresholds and a requirement for the European Commission to reassess self-hosted wallet risks by 30 June 2026. That decision is chronicled alongside other pressure campaigns in our Crackdown: EU Outlaw Attempt timeline, showing how grassroots feedback prevented the harshest language from surviving.

Impact on CASPs, Mixers, and Users

For exchanges and custodial wallets, the new regime means documenting wallet-ownership checks, storing Travel Rule payloads for any transfer touching €1,000, and declining to service sanctioned entities. It does not outlaw mixers, coinjoins, or privacy coins outright, but regulated venues must prove they screened flows—mirroring the monitoring practices discussed in our private exchange roundup. Mixers and collaborative transaction tools that are fully non-custodial remain outside the AMLR’s definition of a CASP, although operators should expect banks and payment processors to demand provenance evidence for payouts.

For everyday users, the headline takeaway is simpler: you can still move unlimited value between your own wallets without telling a regulator who you are. Once a CASP enters the picture—depositing to a broker, withdrawing from a centralized exchange, or redeeming funds via an OTC desk—you should assume ownership verification and CDD steps will kick in. Keep proof-of-funds handy, archive withdrawal addresses, and stay mindful of how these policies interact with other enforcement waves detailed in the Wallets Block US overview and our mixer privacy guide.

What to Watch Before 2027

The TFR instructs the European Commission to deliver a report by 30 June 2026 assessing self-hosted wallets and recommending any extra safeguards. That could reignite the debate around caps or registries, particularly if new scandals fuel media pressure. National supervisors are also drafting rulebooks for how they will audit CASP compliance, so expect divergent interpretations across member states. Germany and the Netherlands have already hinted at enhanced due diligence when self-hosted addresses interact with mixers frequently, while smaller jurisdictions may take a lighter-touch approach.

Privacy advocates should monitor delegated acts, national AML authority consultations, and the upcoming MiCA reviews. Maintaining public comments, sharing real data about how self-custody supports financial inclusion, and demonstrating responsible screening practices (again, tools like the AML Checker help) are the most effective ways to keep the debate grounded. The failed 2024 cap attempt proves the industry can steer policy, but complacency would invite a repeat of the same amendment in the next legislative package.

References

Author

NotATether

Bitcoin privacy researcher and maintainer of BitMixList. Focused on mixer history, enforcement timelines, and practical privacy workflows for users operating in high-friction jurisdictions.