Europe is tightening its grip on crypto. Europol shut down a crypto mixing service, Coinbase reported a record 12,716 law enforcement requests, and new UK rules will force more tax reporting from January. The moves show regulators and police in Europe are turning up the pressure on privacy tools and exchanges alike.
Record data demands hit Coinbase
Coinbases 2025 transparency report shows requests for user data rose 19% year over year to 12,716. Nearly half came from Europe. France and the United Kingdom stood out with big increases in requests, jumping 111% and 16% respectively.
Most requests were filed by national and federal criminal investigation units, underscoring a rise in cybercrime and money laundering probes tied to digital assets.
Europol targets a DeFi mixer
On the enforcement side, Europol said it shut down Cryptomixer, a decentralized finance (DeFi) tool that blended transactions from many users. Mixers aim to make it harder to trace funds by jumbling deposits and withdrawalsike shuffling cards so you cant tell which is which.
Europol said the service is suspected of helping cybercrime and money laundering, echoing earlier actions against Tornado Cash. In August, Tornado Cash developer Roman Storm was found guilty of money laundering, a verdict that has put open-source privacy tools under intense legal scrutiny.
UK tax clampdown starts January 1
Britain is adding a tax angle to the crackdown. Starting Jan. 1, UK crypto users must report all transactions and personal details to trading platforms and to His Majestys Revenue and Customs (HMRC). The policy is expected to raise more than $300 million by 2030, according to an HMRC release.
For everyday traders, that means more forms, tighter deadlines, and fewer ways to ignore taxable gains or losses.
Stablecoins also under the microscope
Europes central bankers arent sitting out. Just last week, the European Central Bank (ECB) warned that stablecoinscrypto tokens designed to hold a steady valuepose risks to financial stability. Combined with the expanding Markets in Crypto-Assets (MiCA) rules rolling out across the EU, the message is clear: transparency and control are priorities.
Why this matters
- Privacy tools face heat: The mixer takedown and the Tornado Cash verdict signal tougher treatment of services that break transaction links.
- Exchanges must scale compliance: A 19% jump in data requests means higher costs and faster response times for platforms like Coinbase.
- Users will feel it: UK rules bring stricter tax reporting, while rising data requests increase the odds of user information being handed to authorities.
- Market risk shifts: If privacy tools shrink and compliance costs rise, liquidity could concentrate on fewer, heavily regulated venues.
What to watch next
- Further mixer actions: Expect more investigations into tools that obscure funds, especially those tied to hacks or ransomware.
- Stablecoin oversight: The ECBs stance could shape new guardrails for issuers and exchanges that list them.
- Legal fallout: Post-verdict developments in the Tornado Cash case, including appeals and sentencing, will influence how courts view open-source code in crypto.
- Tax data sharing: The UKs reporting push may spur similar measures across Europe, accelerating cross-border information flows.
Bottom line
Europe is moving faster on enforcement than on permission. For investors and builders, that means fewer gray areas, more paperwork, and a premium on compliance-first products.