Starting July 1, 2027 EU will enforce mandatory ID verification for crypto transactions

Many people already know this, but it's still important to know. That's why I'm creating a thread. Partly because I've seen this news go viral again on X and other platforms in recent days.

Starting in July 2027, the European Union will implement stricter anti-money laundering rules for crypto transactions through the Anti-Money Laundering Regulation (AMLR, Regulation (EU) 2024/1624).

This includes: A ban on anonymous crypto accounts and wallets with regulated crypto-asset service providers (CASPs), such as exchanges and custodial wallets. And a ban on privacy coins (such as Monero, Zcash, and Dash) with these providers, as they anonymize transactions.

Mandatory identity verification (KYC/CDD) for transactions over €1,000, and in many cases also for smaller amounts or when interacting with self-custody wallets. The 'Travel Rule' for all crypto transfers (no threshold): CASPs must collect and transmit information about the sender and recipient, similar to bank transfers.

This applies specifically to regulated platforms and service providers in the EU. Pure peer-to-peer transactions (without an intermediary) or self-custody wallets (such as hardware wallets) are not prohibited, but if you trade through an exchange with a self-custody wallet, ownership verification may be required for amounts above €1.000

The full text of the AMLR: https://eur-lex.europa.eu/eli/reg/2024/1624/oj/eng (see in particular articles on anonymous accounts, privacy coins and CDD obligations for CASPs)

As the news goes viral again, Patrick Hansen (EU policy director at Circle) responds to the hype: here and here

The same AML package also includes a ban on cash payments exceeding €10,000 for professional traders and businesses.

Business transactions: If you, as a private individual, buy something from a business (e.g., a car, boat, art, jewelry) and want to pay more than €10,000 in cash, you are no longer permitted to do so. The seller must refuse.

ID requirement above €3,000: For cash payments between €3,000 and €10,000, the seller must verify your identity (name, address, ID number).

Private individuals: If you and I sell something privately (e.g., a used car for €12,000 in cash), this rule does not apply. There is no limit or ID requirement for private individuals. However, some countries (may) have other and lower limits.

The EUSSR thanks you for your attention and cooperation.