EU Extends Guidance to Crypto Firms to Comply With Anti-Money Laundering Requirements
The European Union (EU) through the European Banking Authority (EBA), has extended its guidelines on money laundering (ML) and terrorist financing (TF) risk factors to crypto-asset service providers (CASPs).
The new Guidelines highlight ML/TF risk factors and mitigating measures that CASPs need to consider, representing an important step forward in the EU’s fight against financial crime.
By extending the scope of its existing measures to cover crypto, the European Banking Authority (EBA) “harmonizes the approach” that crypto asset service providers (CASP) across the EU should adopt to combat financial crime.
It said in a press statement,
“The risks of this happening can be increased, for example, because of the speed of crypto-asset transfers or because some products contain features that hide the user’s identity. Therefore, it is important that CASPs know about these risks and put in place measures that effectively mitigate them”.
Given the interdependence of the financial sector, the new Guidelines also include guidance addressed to other credit and financial institutions that have CASPs as their customers or that are exposed to crypto assets. This risk is increased when credit and financial institutions engage in business relationships with providers of crypto-asset services that are not authorized under Regulation (EU) 2023/1114.
By extending the scope of the ML/TF Risk Factors Guidelines, the EBA harmonizes the approach that CASPs across the EU should adopt when implementing the risk-based approach to AML/CFT as part of their business.
The deadline for competent authorities to report whether they comply with the Guidelines will be two months after the publication of the translations into the official EU languages. The amending Guidelines will apply from 30 December 2024.
