EU Tightens Grip on Crypto: Stricter Controls Coming

EU Tightens Grip on Cryptocurrencies: Stricter Controls on Financial Transactions Ahead

10 May 2025 at 07: 07

Reading time: 2 minutes

The European Union is moving ahead with the regulation of crypto transactions. At the European Anti-Financial Crime Summit 2025 in Dublin, Paschal Donohoe, President of the Eurogroup and Irish Minister of Finance, gave a clear message about the EU’s new plans. The need to more strictly control crypto transactions is now high on the agenda.

Transparency in the cryptosphere

In his keynote address, Donohoe highlighted that the new regulation aims to improve transparency between senders and recipients of crypto transactions. He spoke about a “reclassification of performance transfer mechanisms” at the level of EU law, where data from both senders and recipients must be strictly recorded. This means that crypto asset service providers (CASPs) will in the future be subject to the same rigorous reporting obligations as traditional financial institutions.

“It is crucial that we expand the scope of this financial regulation,” Donohoe said. The move is designed to address transparency issues in the crypto sector and combat criminal activity such as money laundering and terrorist financing. It seems the EU is determined to move beyond words in the fight against financial abuses.

Stricter rules for crypto companies

With the new AML regulation coming into effect on July 1, 2027, crypto businesses are in for some major changes. For example, they will be banned from doing business with anonymous wallets and privacy coins, significantly reducing anonymity within the sector. Regulators will also be given the power to block IP addresses of non-compliant decentralized exchanges.

However, there is also critical feedback on these proposed measures. Patrick Hansen, EU Strategy and Policy Director at Circle, pointed out that this new AMLR law is “not a specific crypto regulation,” but rather a broader financial law that affects all financial institutions, including crypto companies. James Toledano, COO of Unity Wallet, warned that the new rules could undermine the foundation of decentralized finance (DeFi). “These laws follow traditional banking standards and are difficult to reconcile with the decentralized nature of crypto,” he noted. “Moreover, these regulations can be easily circumvented; self-custody of crypto is common worldwide and holders will find other ways to access their assets.”

Frequently Asked Questions

What is Donohoe's central message during the summit?
Donohoe's central message is that the EU is working towards stricter regulation of crypto transactions to increase transparency and combat financial crime.

How do the new rules affect crypto companies?
The new AML regulation prohibits crypto companies from doing business with anonymous wallets and privacy coins, forcing them to give up their anonymity and adhere to strict reporting obligations.

What are the concerns of critics about this new regulation?
Critics point out that the new measures will not only affect crypto companies but the entire financial sector, and they fear that these rules could undermine the foundations of decentralized finance.

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