Bitcoin wallets interacting with this specific protocol are now flagged for “high-risk” seizures by compliance algorithms

Coordinated European enforcement actions against crypto mixers, driven by new AML legislation (AMLR/AMLA) and agencies like Europol and Eurojust, are fundamentally reshaping Bitcoin liquidity in the region. While decentralized protocols like CoinJoin cannot be seized, centralized mixers are being dismantled via server seizures and asset freezes. Crucially, licensed EU exchanges must now treat UTXOs linked to mixer activity as high-risk, triggering automated flagging, potential freezes, or source-of-funds requests via KYT scores. This friction forces privacy-seeking users to migrate activity outside the EU, leading to liquidity fragmentation and wider spreads within the bloc. Although this doesn't ban privacy technology, it forces its practice into narrower, more complex corridors, increasing friction for ordinary users through false positives and transaction delays.

(Source：CryptoSlate)