From Decentralised to Monitored: EU Announces Plan to Track All Crypto Transfers in Anti-Crime Effort

EU Pushes for Transparent Crypto Transfers With New Legislation

During the European Anti-Financial Crime Summit 2025 in Dublin, Paschal Donohoe, Eurogroup President and Ireland’s Minister for Finance, highlighted the European Union’s efforts to strengthen the tracking of cryptocurrency transactions.

The goal is to bring more transparency to cryptocurrency transactions, with plans to track the senders and recipients of crypto assets more closely.

This move is part of broader efforts to combat financial crime, including money laundering and terrorism financing.

New EU Proposal Aims to Track Crypto Transactions

The proposed legislation targets enhanced traceability for crypto transactions, focusing on gathering data on both the senders and recipients of funds.

According to Donohoe, this shift would extend financial regulation to include crypto asset service providers, ensuring a broader scope of oversight.

Donohoe said,

"It's essential that we broaden the scope of this kind of financial regulation."

He emphasised the need for transparency, noting that the focus would move beyond traditional financial transfers to address the specific challenges posed by the crypto sector.

Stricter Rules to Combat Money Laundering and Terrorism Financing

The EU is also strengthening its regulatory framework to address money laundering (AML) and the financing of terrorism (CFT).

A key element of this effort is the establishment of the new Anti-Money Laundering Authority (AMLA), which will oversee the implementation of a unified set of rules for financial institutions across Europe.

Donohoe stressed,

"Closer cooperation and coordination is absolutely critical. Not just at an international level, at a European level."

The EU aims to create a strong toolkit to combat serious financial crimes and streamline AML and CFT rules across member states.

A major milestone in this effort is the introduction of a single rulebook, set to harmonise regulations for crypto service providers and other financial entities.

Crypto Service Providers to Face New Compliance Measures

A significant aspect of the EU's upcoming regulations is the requirement for crypto service providers, such as exchanges and wallet providers, to verify the identities of their customers.

This includes transactions under €1,000, with plans to block anonymous wallets entirely by 2027.

The move also extends to privacy coins like Monero (XMR), Zcash (ZEC), and Dash (DASH), which have been used to anonymise transactions but are now being targeted for a ban due to concerns about their misuse in criminal activities.

According to Donohoe, such transparency is vital in the fight against financial crime.

“It’s essential that we broaden the scope of this kind of financial regulation.”

Challenges and Concerns From the Crypto Community

While many in the EU acknowledge the need to address financial crime, some in the crypto community view the regulations as an overreach.

Critics argue that the tightening of surveillance could infringe on privacy rights and stifle innovation.

They fear that such measures could limit the decentralised nature of cryptocurrencies, potentially driving developers and projects out of the EU.

James Toledano, COO of Unity Wallet, voiced concerns that the new rules, which mirror traditional banking standards, do not align with the ethos of decentralised finance (DeFi).

“They can and will be easily circumvented as self-custodial crypto is truly global and holders will find other ways of cashing out their chips.”

Privacy Coins Under the EU’s Regulatory Scrutiny

The future of privacy coins is a key point of contention.

These cryptocurrencies are designed to ensure transaction anonymity, protecting user privacy but also enabling illegal activities.

The EU is moving to ban them by 2027, a step that will have significant implications for crypto users and developers who rely on these technologies for privacy and security.

The debate continues to grow as the EU pushes forward with its plan, leaving many to question the balance between financial transparency and individual freedoms in the digital age.

While the regulations aim to tighten security, they also raise concerns about the potential for surveillance and the future of Europe’s crypto sector.