Privacy Coins and the Law: What Is Banned, What Is Not, and What Is Still Being Argued

Privacy coins, such as Monero and the shielded form of Zcash, hide the sender, recipient or amount of a transaction. Mixers do something similar for coins that are otherwise traceable. Regulators treat both as a money-laundering risk. They have not, for the most part, banned people from holding them.

European Union: a dated ban on intermediaries

The EU Anti-Money Laundering Regulation (Regulation (EU) 2024/1624) applies from 10 July 2027. Article 79 bars banks, financial institutions and crypto-asset service providers from keeping anonymous accounts or handling anonymity-enhancing coins. It regulates the firms, not the individual: holding such assets in a personal wallet and transferring them directly to another person are not prohibited by that rule. Several large exchanges have already removed Monero for European customers.

United States: two signals

Treasury lifted its sanctions on the mixer Tornado Cash in 2025. In October 2026 it was reported to have withdrawn a proposed rule that would have imposed special reporting on mixer transactions, citing the chilling effect on lawful activity. At the same time, federal prosecutors are still pursuing Roman Storm, a Tornado Cash developer. A jury convicted him on one count in August 2025 and could not agree on others. A retrial on those has been listed for 2027.

United Kingdom

There is no specific ban. Crypto firms must apply anti-money-laundering rules, which in practice makes privacy coins hard for a regulated UK business to support.

The tension

Data protection law tells organisations to collect less. Anti-money-laundering law tells them to identify everyone and keep the records. Financial privacy tools sit exactly on that fault line.

The technology is not illegal. The pressure is on every regulated business that touches it.

Anyone building or advising in this area should separate three questions: what the code does, who operates it, and who profits.

This article is general information on the law as at November 2026. It is not legal advice and has not been updated since that date. See the terms of use.