EBA Extends AML and CTF Guidelines to European Crypto Firms to Combat Financial Crimes
Summary:
The European Banking Authority (EBA) extends Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) guidelines to European cryptocurrency companies, aiming to help them identify and mitigate their exposure to financial crimes. The revised guidelines, which kick off from December 30, discuss potential risks tied to crypto firms and offer detailed actions for risk management. These developments are seen as a crucial stride towards harmonizing EU's approach to managing the risk of financial crimes in the crypto sector.
In a new development, cryptocurrency businesses within Europe now fall under Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) guidelines provided by the European Union. This came into effect after a directive from the European Banking Authority (EBA), the region's financial regulatory body, on January 16th. The revised guidelines are targeted at assisting these crypto asset service providers (CASPs) to develop an understanding of their vulnerability to financial criminal activities, considering various factors such as their clientele, array of products, methods of delivery and location.
Furthermore, the guidelines indicate the necessary steps crypto firms are required to take to enhance their approach to mitigating financial crimes, possibly introducing blockchain analytical tools. The set guidelines will commence from December 30th, as per the EBA. The regulatory body warmly welcomes the amendment considering it a significant stride in combatting financial crime within the EU, and enabling a uniform method of operation for these crypto firms to maintain a check on money laundering and terror financing.
An integral part of these amended guidelines includes a comprehensive understanding of cryptocurrency and the unique risks associated with crypto companies for financial establishments dealing in cryptocurrencies or providing services to crypto firms. Essential advice pertaining to assessing the financial crime risk for crypto firms has also been provided; the firms have been advised to evaluate potential risks associated with aspects like anonymity-enhancing characteristics, self-controlled wallets, decentralized platforms, and services enabling transfer between the firm and such services.
In the past year, the EU has implemented the Transfer of Funds Regulation (ToFR), which governs crypto transfers, and the far-reaching Markets in Crypto-Assets (MiCA) regulations. While MiCA has provided protections for crypto investors and is due to be enforced in December, the European Union member states have the provision to implement a transitional period of 18 months for CASPs, permitting them to operate without a license.
Published At
1/17/2024 4:57:24 AM
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