The post When privacy and AML laws conflict: Crypto projects’ impossible choice appeared on BitcoinEthereumNews.com.

Crypto was originally most closely associated with anonymity, but in 2025, the crypto ecosystem has changed. User privacy is diminishing, as new laws in different jurisdictions across the globe require Know Your Customer and ID checks for wallets or exchange accounts to combat money laundering. The increasing sophistication of blockchain analysis tools means that every transaction has a transparent trail that can be traced back to its source. As a result, onchain privacy has become a major theme. In October, the Ethereum Foundation announced the formation of its “Privacy Cluster,” a group of some 47 researchers, engineers and cryptographers who are working to make the base layer of Ethereum private. This takes the form of Kohaku, a modular framework for the network that allows senders and receivers to hide their real wallet address, among other functions. It claims to be compliant, but Signal, from ZK privacy solution Onflow, argued that “from a legality perspective, in ~0% of the large jurisdictions would view keys be considered compliance.” It turns out crypto platforms face a seemingly impossible task in complying with opaque rules designed for centralized entities to protect the data privacy of individuals, while still being compliant with financial rules around transparency. To better understand these complexities, Magazine spoke with Charlyn Ho, CEO of Rikka — a law and consulting firm specializing in privacy, technology transactions and cybersecurity. This conversation has been edited for clarity and length. Magazine: What’s even legal when it comes to private crypto transactions? Ho: It’s a little bit complicated because every single jurisdiction has its own privacy laws. So, for example, let’s just take Europe. Europe has the GDPR [General Data Protection Regulation]. But in recent times, it’s promulgated all these other laws that are kind of layered on top or adjacent to GDPR. For example,…

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Filed under: News - @ November 28, 2025 4:27 am