# @punk6052: EU AML regulations threaten privacy coins on centralized exchanges

Source: https://x.com/punk6052/status/1918291966753948045

## Summary

The EU's anti-money laundering regulations would bar centralised crypto-asset providers from serving anonymous accounts or accounts that allow increased obfuscation of transactions, including through anonymity-enhancing coins. The author, @punk6052, says this could lead to privacy coins such as Zcash and Monero being delisted from EU centralised exchanges and no longer custodied by those providers. The prohibition does not reach hardware and software providers or self-hosted wallets that lack access to or control over users' wallets, so wallets such as Metamask, Rabby, Zashi and Monero's wallets are not technically banned from enabling peer-to-peer transactions. The author calls this a regulatory own goal that conflicts with the EU's stated position that data should be fully anonymised, and argues it will deter software developers and reduce tax revenue.

## Article

The EU AML regulations effectively provide that:

1. Centralised crypto-asset providers (CASPs) will be prohibited from providing services for anonymous crypto-asset accounts or accounts allowing increased obfuscation of transactions, including through anonymity-enhancing coins. This means Zcash, Monero and other privacy enhancing coins may be de-listed from centralised crypto exchanges in the EU and you won't be able to custody such coins via CASPs. 

2. Importantly, that prohibition does not apply to providers of hardware and software or providers of self-hosted wallets insofar as they do not possess access to or control over those crypto-asset wallets. This means that Metamask / Rabby / Zcash / Zashi / Monero are not technically banned from enabling  peer-to-peer transactions.

My overall take is that:

◈ this is another massive regulatory own goal for the EU, which effectively bans privacy enhancing technologies from co-existing with the traditional EU financial sector. This is also fully at odds and "Kafkaesque" with the EU's position that "data should be fully anonymised" (see link to that below in the EU AML regs!!)

◈ this ultimately means that the EU will not attract software developers developing cutting edge technologies and will result in less taxes and overall a poorer economy. NGMI.

## Comments

**mishaderidder.eth**: Luckily we have decentralised exchanges too. Obvious where the future is for exchanges ;)