EU Banking Authority Broadens Anti-Money Laundering Guidelines to Include Cryptocurrency

The European Union’s Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) guidelines have been expanded to encompass European cryptocurrency companies, as per a decision by the European Banking Authority (EBA).

On January 16, the EBA announced that the revised guidelines are designed to assist crypto asset service providers (CASPs) in identifying their exposure risk to financial crimes related to their “customers, products, delivery channels, and geographical locations.” The guidelines, effective from December 30, also provide instructions for crypto firms to adapt their measures against financial crimes, potentially involving the use of blockchain analytics tools.

The EBA asserts that these amendments represent a significant stride in the EU’s efforts to combat financial crime and aim to standardize the approach for crypto firms across the union, mitigating the risks of money laundering and terror financing.

The updated guidelines introduce specific considerations for cryptocurrency and crypto company-related risks, offering guidance to financial entities that hold cryptocurrencies or provide services to crypto firms. Additionally, the guidance includes risk assessment directives, urging crypto firms to evaluate potential risks associated with features that enhance anonymity, self-hosted wallets, decentralized platforms, and products facilitating transfers between the company and such services.

This development follows the EU’s finalization of the Transfer of Funds Regulation (ToFR) governing crypto transfers and the comprehensive Markets in Crypto-Assets (MiCA) regulations last year. MiCA’s provisions for crypto investor protections are scheduled to take effect in December, with EU member states having the option to implement an 18-month transitional period for CASPs, allowing them to operate without a license during this time.

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