Patrick Hansen, Circle's Director of EU Strategy and Policy, has once again stepped forward to correct widespread misinformation about the European Union's Anti-Money Laundering Regulation (AMLR), emphasizing that the framework does not ban self-custody wallets or peer-to-peer cryptocurrency transactions despite viral claims suggesting otherwise.
The clarification comes amid renewed confusion in the cryptocurrency community as the AMLR approaches its expected implementation date around summer 2027. Hansen's intervention follows a pattern established in March 2024, when he similarly debunked panic-inducing reports that incorrectly claimed the EU was banning anonymous crypto wallets.
"Again, a bunch of big crypto accounts are claiming upcoming AML rules will ban self-custody or anonymous crypto & Bitcoin transactions in the EU. That's wrong," Hansen stated in recent social media commentary, addressing misconceptions that have repeatedly surfaced across cryptocurrency forums and news outlets.
The confusion stems from misinterpretation of the comprehensive anti-money laundering framework designed to combat financial crime and terrorist financing across the European Union's 27 member states. According to Hansen's detailed breakdown, the AMLR's obligations apply exclusively to crypto-asset service providers (CASPs)—including exchanges, brokers, and custodial wallet platforms - rather than individuals using self-custody solutions.
"The AMLR is not a crypto regulation," Hansen explained in his March 2024 clarification. "It is a broad anti-money laundering/counter-terrorist financing framework that applies to institutions classified as 'obliged entities.'"
The regulation explicitly excludes providers of hardware and software wallets, such as Ledger and MetaMask, that do not have access to or control over users' crypto assets. Peer-to-peer transfers between individuals remain unaffected, preserving the decentralized ethos that attracted many to cryptocurrency in the first place.
What the AMLR Actually Mandates
Contrary to social media panic, the AMLR reinforces existing practices rather than introducing sweeping new restrictions. The framework requires CASPs—centralized exchanges and custodial services regulated under the Markets in Crypto-Assets (MiCA) legislation - to follow standard know-your-customer and anti-money laundering procedures.
These obligations are not novel. All crypto exchanges and custodial wallet providers in the EU already operate under similar requirements established by the Fifth Anti-Money Laundering Directive (AMLD5). The AMLR consolidates and updates these rules within a unified framework.
Article 58 of the AMLR explicitly prohibits CASPs from providing anonymous accounts, meaning custodial crypto businesses cannot service anonymous users. However, as Hansen emphasized, "This is already prohibited under existing AML rules anyway, so nothing new."
The regulation does impose a €10,000 cap on physical cash payments, though individual member states retain the authority to set stricter thresholds. Additionally, privacy coins like Monero and Zcash will be banned from regulated platforms when the AMLR takes full effect in July 2027, but this restriction applies only to CASPs, not individual users.
Advocacy Softened Earlier Proposals
Hansen credited sustained industry engagement for ensuring the final AMLR text represents a significant improvement over earlier drafts. Initial proposals included far more restrictive measures that would have severely limited cryptocurrency innovation in Europe.
Early versions suggested limiting merchant payments from self-custody wallets to just €1,000. The European Parliament also initially proposed extending AMLR compliance obligations to decentralized autonomous organizations (DAOs), decentralized finance (DeFi) protocols, NFT platforms, and even individual developers—measures that were ultimately removed from the final text.
"Education and advocacy efforts" proved essential in securing a balanced outcome that preserves Europe's innovation potential while maintaining necessary regulatory safeguards, according to Hansen's assessment. The collaborative approach between industry stakeholders and regulators prevented what could have been a devastating blow to European cryptocurrency development.
"The impact on self-custody wallets and CASPs is very limited, almost zero," Hansen explained, emphasizing that the final regulation's effect on the broader crypto market is "extremely limited."
Parallel Challenge: MiCA-PSD2 Dual Licensing Conflict
While clarifying AMLR misconceptions, Hansen has simultaneously raised alarms about a separate regulatory challenge threatening euro stablecoin adoption. In late October 2025, he warned that overlapping requirements between MiCA and the Payment Services Directive 2 (PSD2) could force stablecoin firms to secure dual licenses for identical activities starting March 2026.
The European Banking Authority confirmed in June 2025 that stablecoin custody and transfer services fall under PSD2's scope despite already being covered by MiCA licensing. This interpretation would require companies to obtain both a MiCA crypto-asset service provider license and a separate payment institution license - potentially doubling compliance costs to approximately €250,000 in capital requirements plus additional supervisory fees.
"Under current EBA guidance, businesses using e-money tokens could soon face dual licensing requirements: a MiCA CASP licence, and a PSD2 payment licence for the same custody or transfer activity - starting March 2026," Hansen stated on social media. "That means regulatory duplication for firms handling stablecoin services."
Hansen characterized the situation as a potential "regulatory own goal" that contradicts the EU's stated objectives of proportionality and legal clarity. Circle CEO Jeremy Allaire echoed the concerns, calling it a "critical moment for regulatory simplicity" in Europe's stablecoin market.
Industry stakeholders have urged EU lawmakers to extend the transition period to at least 2027 and amend the upcoming Payment Services Directive 3 (PSD3) legislation to eliminate the regulatory overlap. Without such corrections, crypto-asset service providers may withdraw from euro stablecoin custody and transfer services, potentially slowing adoption and pushing users toward unbacked crypto assets.
Implementation Timeline and Market Impact
The AMLR requires final approval in the European Parliament before entering application three years after publication, targeting a summer 2027 implementation date. During this transition period, a new supervisory body - the Anti-Money Laundering Authority (AMLA) - will prepare to oversee up to 40 major CASPs operating across at least six EU member states.
Selection criteria for direct AMLA supervision include firms managing over 20,000 accounts or processing more than €50 million in annual transactions, ensuring that only entities with substantial cross-border operations face enhanced scrutiny.
For European cryptocurrency users, the practical implications remain modest. Individuals can continue using self-custody wallets freely, transferring cryptocurrency peer-to-peer without restriction, and maintaining control over their private keys. The regulation focuses enforcement on intermediaries - exchanges, brokers, and custodial services - rather than end users managing their own crypto assets.
However, Hansen cautioned that misinformation campaigns distort public debate and potentially undermine productive industry-regulator dialogue. "Crypto Twitter and even some media continue to misread EU policy," he noted. "It's vital to stick to the facts."
The distinction matters significantly as European cryptocurrency markets mature under comprehensive regulatory frameworks including MiCA, AMLR, and associated directives. These regulations collectively position the EU as having among the strictest stablecoin regulations globally - more stringent than requirements in the United States or United Kingdom according to a 2025 Journal of International Economic Law study.
As implementation dates approach, Hansen's clarifications highlight that effective regulation requires accuracy, proportionality, and sustained stakeholder engagement. The AMLR's evolution from overly restrictive early drafts to a more balanced final text demonstrates that advocacy matters - but only when based on factual understanding rather than fear-driven speculation.
For now, European cryptocurrency users can maintain confidence that their right to self-custody remains protected, even as the regulatory environment around professional service providers continues evolving toward greater transparency and accountability.
