The Karenisation of the EU is nothing new; they’ve shown signs of Bitcoin derangement syndrome for some time and are still firmly in the fight-you stage. If they’re not attempting to ban mining in the region, it’s trying to discourage using self-hosted wallets.
And you know what? You love to see them try. It’s good for them to give it their best shot and fail so publicly because it shows how robust Bitcoin is.
Bitcoin always needs an enemy to test its resolve.
There’s no value in censorship resistance and seizure resistance if there isn’t an entity with a monopoly on violence wanting to force its rules down your throat.
While the mining ban and unhosted wallets have gone quiet, the EU has been working on a ban on coin mixing for some time. Under this bill Bitcoin and crypto transfers under €1,000, service providers need to perform basic KYC to identify their users.
While transactions are higher than €1,000, customer due diligence measures apply, which means longer-term tracking of user behaviour and identity on top of KYC.
The bill also bans tools that enable anonymity. That includes listing tokens like Monero or Zcash, only showing how weak a case for privacy on the base layer becomes.
All it does is dry up your liquidity avenues and demand for your coin, driving number go down technology further discouraging use. At least with Bitcoin, you can still grow your on-ramps and user numbers, which can only benefit privacy protocols built on top of it.
There’s no point in having a privacy coin; your choke point is that no one wants to accept it. Despite these obvious shortcomings, privacy coin bros will continue to ignore it and hold it to zero, and you know what?
I find it admirable that you’re willing to go down with the ship.
Are you hiding UTXOs under the floorboards? Are you not?
Anyway, back to the ban!
The EU has a clear desire to sniff every citizen’s arse every time they want to spend their Bitcoin is a fetish I am just not on board with, and its kinda creepy, sorry but that’s where I draw the line.
Now the arse sniffing seems to be gathering pace in 2025 with France’s proposed legislation aimed at restricting cryptocurrency mixing services as part of broader anti-money laundering (AML) efforts.
France is taking a firm stance on Bitcoin mixers by banning them under new regulations with an amendment which expands the country’s money laundering laws to cover crypto transactions involving mixers.
Sacré bleu, what to do?
What Are Bitcoin Mixers?
Bitcoin mixers, also known as tumblers, are services that pool together multiple users’ Bitcoin transactions to obscure the connection between sending and receiving addresses.
Essentially, you send a quantity of Bitcoin into a pool and take out a different UTXO of the same size.
While these tools can serve legitimate privacy purposes, they’ve drawn scrutiny from regulators due to potential misuse. Since anyone can join a mixing pool, criminals have used it in the past to break on-chain tracking, and therefore, all mixing is bad, and everyone who uses a mixer is bad.
Do you want to send Bitcoin to your family or friends but don’t want them to see your entire balance? No!
You can’t do that, that’s bad, you’re a baddie!
It’s a little privacy-phobic, don’t you think?
Impact of the Proposed Ban
The French legislation would affect:
- Centralised mixing services operating within French jurisdiction
- Exchanges that have to flag or exclude mixed coins
- Users accessing these services from France
- Businesses facilitating known mixing transactions anywhere in the world
Alternative Ways to Maintain Bitcoin Privacy
If mixing services become restricted, users can still maintain transaction privacy through several methods:
Coinjoin Implementations
So there are known CoinJoin services like Wasabi and Ginger, with chain analysis firms tracking these pools regularly, but that doesn’t mean every pool is tracked.
Mixing protocols like JoinMarket and JoinStr offer a decentralised method of mixing, offering enhanced privacy and making it harder to track their mixing behaviour on-chain.
Alternative Layer Solutions
If you think mixing is too much of a risk, you can create a Lightning channel instead, find a few channel partners and open a few channels on the Lightning Network.
Once those UTXOs are locked on L2, it’s much harder to trace since LNs onion-routed transactions inherently provide better privacy by keeping transactions off the main chain and only recording the opening and closing of payment channels.
You can also mix this up with submarine swaps from time to time or even use Liquid as a middleware layer, pegging in your UTXO into Liquid and then swapping for Lightning and vice versa.
Liquid also provides confidential transactions by default, making it harder to apply chain analysis to the transactions on its side chain. I’m a big fan of coin consolidation on Liquid since transactions are generally cheaper than the base chain and even cheaper now with the latest discount.
This gives you the freedom to create a bunch of similar-sized UTXOs, so when you’re ready to move on-chain, you can do so with sizes that aren’t unique and easy to trace.
Best Practices for Privacy
If you’re not comfortable with mixing services but still want to be a pain in the arse for on-chain tracking, you can start by picking a size you are comfortable with and moving that on-chain.
Let’s say you can safely acquire 1 million sats regularly, well then move 1 million sat UTXOs into new addresses each time so you have a bunch of UTXOs ready to go when needed.
Consider the following steps when taking self-custody
- Using new addresses for each transaction
- Avoid coin consolidating on-chain
- Being mindful of transaction patterns
- Using privacy-focused wallets and use your own node
- Look into using tools like PayNym, PayJoin or Silent Payments
If all else fails, there’s always the idea of capital flight; if your stack is that important to you, maybe it’s time to move on.
Broader Industry Impact
The French proposal reflects a growing trend of regulatory oversight in cryptocurrency. Similar measures are being considered in other jurisdictions, highlighting the importance of:
- Understanding local regulations and how they apply
- Using privacy tools and supporting privacy-focused products
- Maintaining proper documentation of transactions
- Working with P2P service providers and circular economies
Looking Forward To Foward Privacy
If I were an EU citizen who cared about privacy, I might be inclined to bitch and moan, and maybe there’s still a cohort in France that believe in the right to financial privacy, willing to take up the fight.
If regulations evolve in an adversarial manner, it can be a pain for everyday use; on the flip side, it is also a motivation for the Bitcoin community to continue to develop innovative solutions that balance privacy and avoid the need for regulatory compliance.
Users should:
- Stay informed about local regulations
- Use privacy tools responsibly
- Consider decentralized alternatives
- Engage with advocacy groups supporting privacy rights
It’s The Catalina Coin Mixer
While restrictions on mixing services may pose challenges, numerous options exist for maintaining financial privacy. If you’re smart, you can still get away with moving funds without Big Brother watching you.
The key is understanding and using the available tools responsibly within regulatory frameworks.
If you’re going to mix well, mix frequently and with as many people as possible; the larger the group requiring anonymity, the easier it is to remain anonymous.
*Disclaimer: This post is for informational purposes only and should not be considered legal or financial advice. Always consult with legal professionals regarding your specific situation and jurisdiction.*
