EBA introduces AML guidelines to the crypto sector

Wednesday 17 January 2024 11:31 CET | News

The European Banking Authority (EBA) has announced that it extended its guidelines on money laundering (ML) and terrorist financing (TF) to crypto-asset service providers (CASPs).

As per the information detailed in the press release, the guidelines underline ML and TF risk factors and mitigating actions that CASPs are required to consider, which represents a significant step in the EU’s fight against financial crime.

The European Banking Authority (EBA) has announced that it extended its guidelines on money laundering (ML) and terrorist financing (TF) to crypto-asset service providers (CASPs).

The EBA’s guidelines for CASPs

Considering that CASPs can be abused for financial crime purposes, including ML and TF, the risks are increased due to the speed of crypto-asset transfers, as well as because some products contain features that hide the user’s identity. Consequently, CASPs need to know about these risks and enforce measures that effectively mitigate them. By introducing these alterations to the guidelines, The EBA intends to support CASPs in identifying these risks by offering a non-exhaustive list of different factors. These aim to indicate the CASP’s exposure to increased or decreased levels of the ML or TF risk because of its customers, products, delivery channels, and geographical location. By taking into account these risk factors, CASPs can better understand their customer base and identify which part of their business or activities are more vulnerable to ML and TF.

Additionally, the guidelines explain how CASPs can adjust their mitigating measures, including the use of blockchain analytics tools. As the financial sector is interdependent, the EBA’s guidelines also integrate assistance to other credit and financial institutions that have CASPs as their customers or that are exposed to crypto assets. These risks expand when credit and financial institutions engage in business relationships with providers of crypto asset services that are not authorised under Regulation (EU) 2023/1114.

By widening the scope of the ML and TF Risk Factors Guidelines, the EBA focuses on matching the approach that CASPs across the EU should adopt when implementing the risk-based method to Anti-Money laundering (AML) and Counter-Terrorist Financing (CTF) as part of their business. The press release also mentions that the deadline for authorities to report whether they comply with the guidelines is set to be two months after the publication of the translations into the official EU languages. Also, the amending guidelines are intended to be applied from 30 December 204 onwards. Currently, the EBA is consulting on the new guidelines to prevent the abuse of fund and crypto-asset transfers for ML/TF purposes, as well as on guidelines on internal policies, procedures, and controls to comply with restrictions that apply to CASPs and other financial institutions.

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Keywords: financial services, financial crime, money laundering, AML, crypto asset
Categories: DeFi & Crypto & Web3
Companies: European Banking Authority
Countries: Europe
This article is part of category

DeFi & Crypto & Web3

European Banking Authority

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