AML Requirements for Crypto Businesses in the EU: What You Need to Know in 2025

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If you're running a crypto business in the European Union, you're not just dealing with code and wallets-you're navigating one of the strictest financial regulatory systems in the world. The EU doesn't just ask crypto firms to follow the rules; it demands they prove they’re following them, every day, in every transaction. And starting in 2025, the stakes have never been higher.

What Changed in 2025? The New EU Crypto Rulebook

Before 2025, crypto businesses in the EU had to deal with a patchwork of national rules. Some countries were strict, others loose. That changed with the full rollout of the Markets in Crypto-Assets Regulation (MiCA) and the new Anti-Money Laundering Regulation (AMLR). These aren’t just updates-they’re replacements. MiCA gives every crypto service provider a single license to operate across all 27 EU countries. AMLR kills the old directives and builds one unified rulebook that applies from Lisbon to Warsaw.

The big shift? No more loopholes. If you’re a crypto exchange, wallet provider, or DeFi platform that touches EU customers, you need a MiCA license. And to get it, you must prove you have real AML controls in place-not just policies on paper, but systems that actually catch suspicious activity.

Who Has to Comply? It’s Not Just Exchanges

You might think only big exchanges like Kraken or Coinbase need to worry. But the rules cover anyone offering crypto services in the EU. That includes:

  • Crypto-to-fiat exchanges
  • Custodial wallet providers
  • Decentralized exchange aggregators that hold user funds
  • Platforms offering staking or lending services
  • Token issuers selling crypto-assets to EU residents

Even if you’re based outside the EU but serve EU customers, you’re in scope. The EU doesn’t care where your server is-it cares where your users are. If a Portuguese person buys Bitcoin from your website, you’re subject to EU law.

The Travel Rule: No Minimum Threshold, No Exceptions

The EU’s version of the Travel Rule is the strictest in the world. Unlike the U.S., which only requires information sharing for transfers over $3,000, the EU applies it to every crypto transfer above €1,000. And it’s not just about names and wallet addresses.

For any transaction over €1,000, you must collect and verify six pieces of data:

  1. Originator’s full name
  2. Originator’s account number or unique identifier
  3. Originator’s physical address or date of birth
  4. Beneficiary’s full name
  5. Beneficiary’s account number or unique identifier
  6. Beneficiary’s physical address

That’s right-even if someone sends you €1,500 from a self-hosted wallet, you’re required to verify their identity. If you can’t, you must block the transaction. This rule alone has forced firms to spend millions on new software. Kraken spent $2.1 million integrating with 28 different national Financial Intelligence Units (FIUs). Smaller firms? Many just gave up.

Customer Due Diligence: Three Tiers, No Room for Guesswork

You can’t just ask for an email and call it KYC. The EU requires a risk-based approach with three clear tiers:

  • Basic verification (under €1,000): Name and address confirmed through ID document or trusted third party.
  • Enhanced verification (€1,000-€10,000): Government-issued ID + proof of address, plus a live selfie or video verification.
  • Strict enhanced due diligence (over €10,000): Full source of funds check, senior management approval, and ongoing monitoring of all activity.

And you must keep records for at least five years. Not seven. Not ten. Five. Miss a record? That’s a fine. Repeat offenses? Your license gets pulled.

European map split between compliant crypto firms and shadowy DeFi protocols watched by an AMLA owl revealing hidden owners.

The New Boss: AMLA Is Watching

In 2025, the Anti-Money Laundering Authority (AMLA) started operations in Brussels. This isn’t another advisory body-it’s a regulator with teeth. AMLA can directly investigate any crypto business in the EU, regardless of where it’s registered. It can demand documents, freeze assets, and impose fines up to 5% of global turnover.

AMLA’s first major review in Q2 2026 will focus on two things: whether firms are properly verifying self-hosted wallet senders (the Travel Rule), and whether they’re hiding who really owns the company. That means if you’re using a Dutch foundation or a Maltese shell to obscure your beneficial owners, AMLA will find you.

DeFi Is Still a Gray Zone-And That’s a Problem

Here’s the catch: most DeFi protocols don’t have a company, CEO, or registered office. They’re just smart contracts on a blockchain. The EU’s rules were written for businesses-not decentralized code. So technically, a DeFi lending protocol isn’t an “obliged entity” under MiCA or AMLR.

But that doesn’t mean it’s safe. German regulators (BaFin) have already flagged DeFi platforms used to launder €23 million in stolen crypto in early 2025. AMLA says it’s working on guidance to target DeFi intermediaries-like wallet aggregators or front-end interfaces-that act as gateways. If your DeFi app makes it easy for users to swap tokens without KYC, you could be held responsible.

Costs Are Sky-High-And Getting Higher

Getting licensed under MiCA isn’t cheap. According to firms that’ve gone through it:

  • Average compliance setup cost: €350,000-€500,000
  • Travel Rule integration per FIU: €185,000
  • Full-time compliance staff needed: 3-5 people
  • Annual staff training: 40 hours for compliance, 16 for ops

For a startup with 5 employees, that’s more than half your budget gone before you even launch. That’s why 68% of small crypto firms in the EU say compliance costs are prohibitive. And 42% are already moving operations to Switzerland or Singapore, where rules are clearer and cheaper.

Startup founder surrounded by compliance costs, a license approved screen, and a door to Switzerland as privacy coins vanish.

What Happens If You Don’t Comply?

The EU doesn’t warn you twice. Non-compliance means:

  • Fines up to 5% of global annual turnover
  • License suspension or revocation
  • Personal liability for executives (AMLD6 lets prosecutors go after CEOs)
  • Public naming and shaming by AMLA

One Estonian crypto firm processed €187 million through a Gibraltar entity to avoid stricter local rules. Both countries fined them. The firm shut down.

Why This Matters for Your Business

Compliance isn’t just about avoiding fines. It’s about trust. In 2025, 89% of institutional investors in the EU only work with MiCA-licensed firms. Banks won’t open accounts for unlicensed crypto businesses. Payment processors block them. Even users are starting to avoid unregulated platforms.

Regulated crypto firms now handle 78% of all EU crypto trading volume-up from 41% in 2023. That’s not a coincidence. It’s market-driven. The EU didn’t just make rules-it created a competitive advantage for those who follow them.

What’s Coming in 2027? The Final Push

The EU-wide AML Regulation kicks in on July 1, 2027. It will:

  • Cap cash payments for business transactions at €10,000
  • Require verification for all cash payments over €3,000
  • Force firms to respond to FIU requests within five working days
  • Expand regulated entities to include football clubs, crowdfunding platforms, and high-value goods traders

And AMLA will start cracking down on privacy coins and mixing services. Expect new guidance in early 2026 targeting tools like Monero or Tornado Cash.

Bottom Line: Play by the Rules or Get Out

The EU isn’t trying to kill crypto. It’s trying to make it safe, transparent, and trustworthy. If you’re building a crypto business and want to serve European customers, you have two choices: invest in real compliance, or walk away. There’s no middle ground.

Those who comply are winning. They’re getting institutional money. They’re building partnerships. They’re growing. The ones who don’t? They’re disappearing.

Do I need a MiCA license if I’m based outside the EU?

Yes-if you serve customers in the EU. The EU’s rules apply based on where users are located, not where your company is registered. If even one EU resident uses your service, you must comply with MiCA and AMLR. Ignoring this won’t protect you-regulators track IP addresses, payment methods, and language settings.

Can I use a third-party provider to handle AML compliance?

You can outsource parts of it-like identity verification or transaction monitoring-but you can’t outsource responsibility. You remain legally liable for every compliance failure. Many firms use platforms like Traveler or ComplyAdvantage, but regulators will still hold your leadership team accountable if something goes wrong.

What’s the difference between AMLD5, AMLD6, and AMLR?

AMLD5 (2020) was the first to bring crypto under EU AML rules. AMLD6 (2020) strengthened penalties and made it easier to prosecute executives. AMLR (2027) replaces both and creates one single, binding law across all 27 countries. Think of it like upgrading from multiple state laws to one federal code.

Are privacy coins banned in the EU?

Not yet. But they’re under direct scrutiny. AMLA has announced plans to issue specific guidance in early 2026 targeting privacy-enhancing technologies. Firms that facilitate transactions involving Monero, Zcash, or similar coins will face heightened scrutiny, and may be required to block them entirely.

How long does it take to get a MiCA license?

On average, 9 to 12 months. The process includes submitting detailed documentation, undergoing technical audits, and passing interviews with national regulators before AMLA gives final approval. Rushing it increases the risk of rejection. Most firms spend 6-8 months just preparing their application.

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19 Comments

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    Eric Redman

    November 1, 2025 AT 09:06
    This is such a load of bureaucratic nonsense. They're not protecting anyone-they're just making it impossible for small devs to even try. If I want to send $1,500 to my cousin in Spain, why the hell do I need to submit my birth certificate to some AI bot? This isn't regulation, it's digital serfdom.
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    Brett Benton

    November 1, 2025 AT 16:10
    Honestly? This is the best thing that could've happened to crypto. I've been burned by sketchy exchanges before. Now, if a platform has the MiCA stamp, I know they're not gonna vanish with my ETH. The costs are brutal, yeah-but trust is priceless. Look at how much more institutional money's flowing in now. This isn't the end of crypto-it's the beginning of real finance.
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    David Roberts

    November 1, 2025 AT 21:00
    The Travel Rule's a legal fiction. You can't verify a self-hosted wallet's originator without compromising decentralization. The EU is conflating KYC with blockchain architecture. This isn't compliance-it's epistemological overreach. If the ledger is immutable, why does a centralized authority need to know who sent what? The contradiction is ontological.
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    Monty Tran

    November 3, 2025 AT 13:11
    The EU is destroying innovation with red tape. MiCA is not regulation it is annihilation. Compliance costs are not expenses they are execution fees for the privilege of existing. The market will adapt or die. No middle ground. No mercy. No exceptions
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    Shaunn Graves

    November 4, 2025 AT 02:14
    Let me get this straight-you're telling me I have to verify the physical address of someone sending me 1,000 euros from a wallet they created on their phone? That's not compliance, that's surveillance. And you call this freedom? You're handing over the keys to the entire crypto ecosystem to bureaucrats who don't understand blockchain. This is a power grab disguised as security.
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    Kaela Coren

    November 5, 2025 AT 03:18
    The structural integrity of the EU's regulatory framework is commendable. The harmonization of AML standards across member states eliminates regulatory arbitrage and enhances systemic resilience. The imposition of granular data collection protocols, while operationally burdensome, aligns with the principle of proportionality in financial oversight. The institutionalization of AMLA represents a paradigmatic shift toward centralized enforcement, which, despite its cost implications, may ultimately fortify market credibility.
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    Nabil ben Salah Nasri

    November 6, 2025 AT 23:47
    I love how this is finally making crypto more legit 💪🔥 I know it sucks paying all that money for compliance but think about it-now banks are actually talking to us! My buddy started a small exchange and got a bank account after 3 months. Before? Zero. Zero! 😅 This isn't the end of crypto, it's the beginning of crypto growing up. We gotta play nice to get a seat at the table 🙌
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    alvin Bachtiar

    November 8, 2025 AT 08:59
    Let’s be real: this isn’t about AML. It’s about control. The EU’s pushing this so they can track every satoshi, shut down privacy tools, and force everyone into their financial monoculture. They hate decentralization. They hate anonymity. They hate that people can move value without their permission. This is digital fascism wrapped in a compliance suit. And don’t even get me started on AMLA-they’re the new Gestapo with Excel sheets.
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    Josh Serum

    November 9, 2025 AT 11:30
    You people don’t get it. This isn’t about money, it’s about ethics. If you’re running a business that touches human lives, you have a moral duty to prevent crime. Money laundering funds cartels, human trafficking, war crimes. You think your 'freedom' to send crypto without verification is noble? It’s selfish. If you can’t handle compliance, maybe you shouldn’t be in finance. This isn’t oppression-it’s responsibility.
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    DeeDee Kallam

    November 9, 2025 AT 16:06
    i just wanna send my friend some btc and now i gotta send my passport and my mom's birth certificate?? this is so dumb. why do they even care?? i'm not a criminal i just want to use crypto. this is so over the top. why cant they just trust people??
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    Helen Hardman

    November 10, 2025 AT 15:28
    I’ve been through the MiCA process and honestly? It’s a nightmare but worth it. We spent 8 months prepping docs, hired 3 compliance folks, paid for 14 FIU integrations, and yeah, it cost us half a million-but now we’re approved in Germany, France, Italy, Spain, and even got a partnership with a bank. Our user base tripled. People feel safe. We’re not just surviving-we’re thriving. If you’re scared of the cost, start small, use a white-label KYC provider, and build from there. It’s not impossible, it’s just hard. And hard is better than dead.
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    Bhavna Suri

    November 11, 2025 AT 12:57
    Too much rules. Too much paper. Too much money. Why not just let people trade? EU is too strict. In India we just use P2P. No license. No problem. Why make it so hard?
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    Elizabeth Melendez

    November 12, 2025 AT 10:20
    ok so i know this sounds crazy but i actually think this is kinda beautiful?? like yeah the costs are insane and the paperwork is a nightmare but imagine if every crypto platform had to do this-no more rug pulls, no more shady wallets, no more 'oops i lost your coins' excuses. i used to be scared to use exchanges but now i see the ones with MiCA and i’m like 'oh cool, they actually care'. it’s not perfect but it’s a start. and honestly? i’d rather pay a little extra to know my money’s safe 💕
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    Phil Higgins

    November 14, 2025 AT 05:26
    The irony is that the EU is trying to create a safe space for innovation, but in doing so, they’re crushing the very spirit that made crypto revolutionary. Decentralization isn’t a bug-it’s the feature. If we start requiring every peer-to-peer transfer to be vetted by a state-approved system, we’re not building a financial future-we’re building a digital welfare state. The question isn’t whether compliance is necessary-it’s whether we’re willing to trade freedom for the illusion of safety.
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    Ron Cassel

    November 14, 2025 AT 08:29
    This is all a psyop. AMLA is a front for the IMF and the UN to track every transaction globally. They’ve been planning this since 2018. The 'Travel Rule' is just the first step. Next they’ll require biometric verification for every wallet. Then they’ll freeze accounts based on AI 'risk scores'. Then they’ll ban Bitcoin entirely. This isn’t regulation-it’s the final stage of financial totalitarianism. Wake up. This is the New World Order.
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    Wesley Grimm

    November 15, 2025 AT 19:17
    The 68% of firms citing prohibitive costs? That’s not a problem-it’s a feature. The EU isn’t trying to help crypto. They’re trying to filter out the amateurs. The ones who can’t afford compliance? They’re the noise. The noise gets silenced. The signal-the ones with capital, lawyers, and infrastructure-survives. This isn’t regulation. It’s Darwinism dressed in a suit.
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    mark Hayes

    November 16, 2025 AT 17:44
    i get both sides. yeah the rules are insane but i also dont wanna get hacked or scammed. maybe there’s a middle ground? like… what if you only need to verify if you’re sending over 5k? or if you’re using a custodial wallet? why make everyone jump through the same hoops? i just hope they don’t kill innovation in the process 🤞
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    Derek Hardman

    November 18, 2025 AT 14:11
    The regulatory clarity provided by MiCA and AMLR, while burdensome in implementation, represents a necessary evolution of financial infrastructure. The prior fragmentation enabled systemic risk and undermined public confidence. The establishment of AMLA as a centralized authority ensures uniform enforcement, which, despite its authoritarian undertones, is preferable to the chaotic patchwork that preceded it. The cost of compliance is the price of legitimacy.
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    Eliane Karp Toledo

    November 19, 2025 AT 18:27
    They’re using AML as an excuse to kill privacy. Monero and Zcash aren’t for criminals-they’re for journalists, activists, abuse survivors. If you can track every transaction, you can control every person. This isn’t about money laundering-it’s about total surveillance. The EU wants you to be a transparent citizen with no secrets. And if you resist? You’re labeled a threat. That’s not safety. That’s control.

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