Anonymous cryptos and anti-laundering regulation

Questions
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Hello,

I have a question about anonymous cryptocurrencies.

In France, there is a new anti-money laundering law that came into effect in June. This law states that the use of cryptocurrencies “with an integrated anonymization function” or the use of any means aimed at preventing the traceability of funds (mixers, multiple wallets) is now presumed to be money laundering related to criminal activities.
I would have liked to know if it is possible to obtain both a payment with relative anonymity AND plausible deniability. My threat model does not involve perfect anonymity (I do not need to resist a targeted investigation). However, I would like, if possible, to avoid operations which could be used against me under this law. So obtaining relative anonymity through ‘normal’ operations, or cryptos that are not as strongly associated with privacy as Monero or Zcash are.
I precise, if needed, that I only use low amounts in crypto.

As far as I know, it seems complicated, by definition, to prove the legal use of an anonymous cryptocurrency. At least, it seems impossible without losing a significant part of the benefit.

However, if you see a way to keep solid evidence (i.e., non-falsifiable) of the use I make of these cryptos, I am also interested.
I don’t know if I am very clear, if not, let me know and I will explain further.

Thank you very much for your help.

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If you are able to acquire even BTC without KYC and deposit it to a non custodial wallet like Cake Wallet, you can get what you want. I recommend checking out your regional/local crypto ATM providers to see what works best for you. Alternatively, you can always have someone buy it for you and have them send it to your non custodial wallet from theirs.

Cake Wallet app has some great features like Payjoin and each transaction using a different address to send or receive funds so it does achieve what you’ve outlined as your requirements. And because it is BTC (or any other currency the app supports), you would be clear of this French law too (with the exception of XMR of course).

And welcome to the forum!

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Link for more context. The law has been passed for a few months right now, and it may spread to other EU countries by 2027

You’re still technically allowed to use anonymous cryptocurrency for personal and non-illegal usage. It’s just that you’re assumed to be an tax-evading broker or launderer until proven innocent in court. Which is frankly absurd but hey! Not every country has the concept of “innocent until proven guilty”.

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I know this has little to do with your question, but since you mention anonymity, it’s worth mentioning that there are solutions such as Tornado Cash for mixing cryptocurrencies so that they cannot be linked to you (Wow, that’s exactly what cryptocurrencies were created for!).

Yes, something as normal as conducting transactions privately has been criminalized.

I recommend reading this article if you want to unlink your transactions.

Best regards.

PS: I forgot to mention that you should be careful, as there are people who create pages that are very similar to the real cryptocurrency mixing pages. (Always check the pages and all the information before proceeding).

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Is this true if you use public cryptos like LTC/BTC? Reason I ask is wondering if the user swaps into XMR that may provide some level of plausible deniability.

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Thank you very much to everyone for your responses!

Unfortunately, the law targets both cryptocurrencies that are designed to be anonymous, as well as ALL processes aimed at obscuring the origin of cryptocurrencies that are not anon by default.

For your information, here is the exact wording:
“For the purposes of Article 324-1, property or income shall be presumed to be the direct or indirect proceeds of a crime or offense if the material, legal, or financial conditions of the investment, concealment, or conversion transaction cannot be justified other than to hide the origin or beneficial owner of such property or income.
This presumption applies to any transaction carried out, under the conditions set out in the first paragraph of this article, using a crypto-asset with a built-in anonymization function or using any type of account or technique that allows for the anonymization or obscuring of crypto-asset transactions.”

(Source : https://www.legifrance.gouv.fr/codes/article_lc/LEGIARTI000051740488)

As I understand it, the burden of proof lies with the prosecution to demonstrate that my intent was to obscure the source of the funds, which is why plausible deniability is necessary on this point.

However, the text remains unclear about the precise anonymization procedures, but it seems that during discussions, mixers like Tornado Cash were also in their sights. Perhaps Cake Wallet is a possible option, if I understand correctly, it’s different from Tornado, the funds are not “mixed” in the strict sense?

Bitcoin ATMs are very rare in France, for the same reasons I suppose, according to my research there are only 3 in the entire country.
Maybe finally buy any crypto P2P without KYC is the strongest solution?

Thanks for your helps!
Best regards.

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If you truly are at risk of this and are genuinely concerned, you should be speaking with an appropriate lawyer about this. All we can do here is advise on what can be done and not what should or must be done. Please keep in this in mind too.

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No, I don’t consider myself as having big risks about it. I know it’s not legal advise, just quoted the law for further information.
I’m just interested about how it can be avoided. Even if they see that I use private payments, I don’t think I have a bit risk for the low amount I occasionally use in crypto. The only goal is to avoid it, if possible, and even if i loose some privacy, it will be enough for me.

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Well, using Cake Wallet app with its features should still keep you in the clear. You can always claim plausible deniability if it ever comes to this concern materializing.

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Acquire cryptocurrencies without KYC, without providing personal data, phone numbers, or anything else. Then those cryptocurrencies will not be linked to you unless you voluntarily link them (or do so by mistake). For example: Exchanging cryptocurrencies for real money in your bank account. In any case, I think using cryptocurrency mixers is a good solution, even though I’ve never used them myself.

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Okay, I’ll look at acquiring without KYC, and the Cake Wallet features looks great!

I think that’s good solutions for me.
Thank you very much for your answers!