An overview of AML crypto regulations in the EU

The cryptocurrency and virtual asset market in the European Union (EU) has become a huge one, with projected revenues set to reach around €22.5 billion, according to some sources. Momentum in the region is unlikely to dissipate, particularly with the rise to prominence of stablecoins. In August 2025, the EU announced it was fast-tracking its plans for a digital euro to keep up with global digital currency adoption. 

However, while crypto is proving increasingly popular with consumers, the speed it offers (especially for cross-border payments) make it vulnerable to exploitation and criminal misuse. To counter these threats, all crypto firms have measures in place to ensure proactive compliance with relevant EU anti-money laundering and countering the financing of terrorism (AML/CFT) regulations. 

This article explains: 

• The AML regulations you need to know about if you’re a crypto firm operating in the EU. 
• Key practical steps for maintaining an effective compliance program. 
• The importance of specialist, AI-native software for growth-boosting compliance. 

What are the key crypto regulations in the EU? 

The EU has been proactive in implementing and refining a regulatory framework for the cryptocurrency and virtual asset sector. Crypto firms operating in the EU should familiarise themselves with these regulations: 

• The Fifth Anti-Money Laundering Directives (5AMLD): The Anti-Money Laundering Directives (AMLD) make up the EU’s central body of AML/CFT legislation. 5AMLD, implemented in 2020, was aimed in part at extending regulatory obligations to the crypto landscape. 5AMLD introduced a legal definition of cryptocurrency and brought both cryptocurrencies and cryptocurrency exchanges within the scope of existing AML/CFT regulations, mandating controls such as customer due diligence, risk assessments, and beneficial ownership reporting. Under 5AMLD, cryptocurrency service providers had to register with financial authorities, and financial intelligence units (FIU) were given powers to obtain the names and addresses of cryptocurrency owners. 
• Funds Transfer Regulation (FTR): A counterpart to the versions of the ‘travel rule’ found in multiple global jurisdictions, the FTR requires identifying information on both the origin and the beneficiary to be sent with any transaction. Crypto service providers must pass this information on to authorities in the event of an investigation into suspected financial crime. 
• Markets in Crypto-Assets Regulation (MiCA): MiCA is a foundational piece of crypto legislation in the EU, providing legal certainty over the status of crypto firms to establish a unified regulatory platform, as well as a crypto licensing regime conditional on firms having effective AML/CFT programs (among other requirements). Specifically, MiCA’s AML rules cover CDD and enhanced due diligence (EDD), ongoing customer monitoring, record-keeping, and suspicious activity reporting.
• The new AML ‘package’: In 2021, the European Commission announced a new ‘package’ to overhaul the EU’s AML/CFT framework, which included the establishment of a new EU-wide regulator: the Anti-Money Laundering Authority (AMLA). In its Work Programme 2025, AMLA announced a strong focus on the consistent application of AML standards across the crypto sector. The rule package also comprehensively expanded the range of crypto firms subject to the EU’s AML framework. 

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How can EU crypto firms comply with AML regulations?

As demonstrated by some substantial enforcement actions against high-profile crypto service providers, EU regulators are maintaining a strong focus on the sector, with the consequences of non-compliance potentially damaging for firms. 

To ensure your business can stay on the right side of regulations and mitigate your financial crime risks, you should implement specialist AML software that allows you to: 

• Carry out risk-based due diligence: Calibrate your customer due diligence (CDD) processes to varied customer risk levels to minimize unnecessary delays during the onboarding phase. Higher-risk customers require enhanced due diligence (EDD), such as extra identification checks or source of funds (SOF) and source of wealth (SOW) checks. 
• Monitor customers after onboarding: The information you gather as part of CDD could be subject to change, so you should treat customer risk levels as dynamic, not static. Rather than periodically re-verifying customer information, which could lead to gaps in your data or inaccurate information, you should conduct automated monitoring on an ongoing basis to understand any changes in customer information that may affect their risk level. 
• Screen payments in real-time: Customers expect their payments to go through instantly – especially in the crypto sector – while regulators demand high security levels as a non-negotiable feature. To balance these imperatives, use a payment screening solution fed with real-time sanctions and watchlist data and capable of maintaining high straight-through processing rates. 
• Conduct efficient transaction monitoring: Your transaction monitoring solution is a critical tool for detecting behavior that may indicate suspicious activity, such as payments inconsistent with customer profiles, unexplained transfers to high-risk jurisdictions, or ‘structured’ payments just below transaction reporting thresholds. Manual transaction monitoring cannot give you the speed and depth you need, especially as you scale, so look for an AI-based solution with expertise in your market.
• Use technology to balance growth with compliance: Fulfilling regulatory requirements while continuing to hit growth targets has often been a difficult challenge for ambitious firms. However, onboarding more customers and processing more transactions does not have to drain resources and slow down growth. By using solutions built around artificial intelligence (AI) and machine learning (ML) to automate parts of the compliance process, you can enhance operational efficiency while reducing the overall cost of compliance. 

AI-powered crypto compliance tools from ComplyAdvantage

ComplyAdvantage helps fast-growing crypto firms across the EU meet their regulatory requirements without sacrificing growth ambitions. Key product features for virtual asset service providers include: 

• Real-time screening capabilities: Our solutions use AI to constantly ingest updates to sanctions lists, global AML watchlists, PEP data, and adverse media – supplying you with the latest risk data instantly.
• Payment screening with both speed and security: ComplyAdvantage Payment Screening lets you process 99 percent of transactions in under half a second while maintaining risk detection with market-leading accuracy. 
• An all-in-one, user-centric platform: Siloed data and fragmented systems cause compliance delays and poor customer experiences. With ComplyAdvantage, get holistic views of risk to make informed decisions on cases without slowing down customer onboarding. 

This article is part of a series on the state of global crypto regulations in 2025. Find out more by reading the other articles in the series: 

• AML regulations for US crypto firms: A 2025 guide
• AML regulations for UK crypto firms: Top compliance tips
• AML regulations for Australian crypto firms: How to comply 
• AML regulations for Canadian crypto firms: 2025 updates
• How to comply with Singapore’s AML regulations for crypto firms