The EU Innovation Hub, a joint initiative of EU member states, has published a report saying that anonymous cryptocurrencies and mixing protocols may not find legislative recognition in Europe.

The report was prepared by six members of the EU Innovation Center on Internal Security: Europol, Eurojust, the European Commission’s Directorate-General for Migration and Home Affairs, the European Commission’s Joint Research Centre, the European Counter-Terrorism Council Coordinator and the European Union Agency for Internal Security.

The EU Innovation Center report highlights the “dual” nature of cryptographic technologies, which allows criminals not only to use illegal methods to hide criminal proceeds, but also to avoid sanctions from law enforcement agencies.

“Digital asset mixers, privacy coins, and zero-knowledge protocols can obscure the visibility of addresses, balances, and cryptocurrency transactions from government regulators. These services have made it difficult for law enforcement agencies to track criminal transactions and combat fraud for many years, and therefore face an uphill battle for legislative recognition in Europe,” the EU Innovation Center said in a report.

In addition to popular mixing services and zero-knowledge proof projects in the crypto community, the EU Innovation Center highlighted digital assets such as Monero, Zcash, Grin and Dash.

Let us recall that at the end of April, the European Parliament approved new Anti-Money Laundering Regulations (AMLR), which tighten controls in the field of digital assets over crypto service providers and users, and also provide for a ban on anonymous transactions using custodial wallets and confidential assets.