EU banking authority broadens AML advice, covers crypto’s shadowy transactions.

January 17, 2024
1 min read

TLDR: The European Union’s banking watchdog, the European Banking Authority (EBA), has extended its Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) guidance to include European crypto companies. The updated guidelines aim to help crypto asset service providers (CASPs) identify their exposure risk to financial crimes and provide instructions for adjusting their financial crime-fighting measures. This includes the use of blockchain analytics tools to combat money laundering and terror financing. The guidelines will apply from December 30th and harmonize the approach for crypto firms across the EU.

The amended guidelines add cryptocurrency and crypto company-specific risks and guidance to financial firms that hold cryptocurrencies or serve crypto companies. The EBA directs crypto firms to consider potential risks associated with anonymity-enhancing features, self-hosted wallets, decentralized platforms, and products that allow transfers between the company and such services. The purpose of these guidelines is to mitigate the risk of money laundering and terrorist financing in the crypto industry.

Last year, the EU finalized regulations governing crypto transfers and comprehensive regulations for crypto markets. The Transfer of Funds Regulation (ToFR) and the Markets in Crypto-Assets (MiCA) regulations aim to provide investor protections and regulate the crypto industry. MiCA’s regulations are set to come into effect in December, but member states may implement an 18-month transitional period for CASPs to operate unlicensed.

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