MiCA and Total Traceability: The End of Crypto Secrecy
In this article
Key Takeaways
- TFR Regulation (Travel Rule)
- Unhosted Wallets under surveillance
- Laundering by Mixers usage
- Crypto Regularization
The Transfer of Funds Regulation (the European 'Travel Rule') requires crypto-asset service providers to identify both originator and beneficiary, and, above 1,000 euros with an unhosted wallet, to assess whether it belongs to their customer. This places documentary traceability at the disposal of the prosecution: failing to declare gains or income from crypto-assets is a tax offence under Art. 305 CP if the tax evaded exceeds 120,000 euros per tax and period. Using mixers or privacy coins is treated as evidence of laundering, requiring the investor to prove the lawful origin of the funds.
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The year 2025 marks the definitive end of anonymity in the European crypto ecosystem. The full entry into force of the Transfer of Funds Regulation (TFR), often called the European "Travel Rule", requires all Crypto-Asset Service Providers (CASPs) to collect and share personal data of originators and beneficiaries in all transactions, without a minimum threshold. These same providers must also hold a licence to operate in Spain, as we explain in our guide on the MiCA licence for exchanges. This has devastating consequences for those who maintained hidden assets in crypto.
The 'Travel Rule' and Money Laundering
If you send cryptocurrencies from a regulated Exchange to an unhosted wallet (Metamask, Ledger), the Exchange must assess, if the operation exceeds 1,000 euros, whether that address is owned or controlled by its customer (Arts. 14.5 and 16.2 of Regulation (EU) 2023/1113); where required information is missing, it may reject, return or suspend the transfer (Art. 17). For criminal defence, this means that documentary traceability is served on a platter to the Prosecution. The argument of "I lost the keys" or "I don't know who owns it" becomes unsustainable.
Implications in Tax Crime
The Treasury now receives automatic information flows. Failing to declare gains or income from these assets can be a tax crime if the tax evaded exceeds 120,000 euros per tax and period (Art. 305 CP). Concealment through undeclared cold wallets can be used as evidence of intent.
The Use of Mixers as Criminal Indication
Under the new regulatory lens, the use of mixing tools (Mixers) or privacy coins (like Monero) may be treated by SEPBLAC and the courts as evidence of laundering. It is advisable to be able to prove the lawful origin of the funds (for example, with forensic reverse traceability reports) to avoid fund blocking and criminal indictment.
Defence of Early Adopter Investors
Our firm specializes in reconstructing the financial history of investors who entered Bitcoin a decade ago, when KYC records did not exist. We use blockchain archaeology to prove that the assets, although opaque, have a lawful and non-criminal origin, dismantling the laundering accusation.
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Official text: article 305 of the Spanish Criminal Code (BOE)
Frequently asked questions
What is the 'Travel Rule' under the TFR Regulation?
It is the transfer-of-funds rule that requires crypto-asset service providers (CASPs) to collect and share the originator's and beneficiary's data on every crypto-asset transfer. For transfers above 1,000 euros involving a self-hosted address, the provider must assess whether that address is owned or controlled by its customer (Arts. 14.5 and 16.2 of Regulation (EU) 2023/1113); where required information is missing, it may reject, return or suspend the transfer (Art. 17).
Can holding undeclared cryptocurrency be a crime?
It can be, but not for merely holding them: the tax offence under Article 305 of the Criminal Code requires evading payment of a tax, so failing to declare gains or income from crypto-assets is an offence if the tax evaded exceeds 120,000 euros per tax and period. Concealment through undeclared cold wallets can be treated as evidence of intent.
Is using mixers or privacy coins like Monero illegal?
Using mixers or privacy coins is not in itself a crime, but SEPBLAC and the courts treat it as a laundering technique that requires the investor to prove the lawful origin of the funds with particular rigour to avoid asset freezing and prosecution.
Does the new traceability affect long-term investors without KYC?
Yes. Investors who acquired crypto-assets years ago, when KYC records did not exist, must be able to document the lawful origin of their wealth. Blockchain traceability makes it possible to reconstruct that history, which is key to dismantling a money-laundering accusation.
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This page is for information purposes only and does not constitute legal advice: every case requires individual assessment. How this content is produced and verified: editorial policy.