EBA Crypto Guidelines Issued To Prevent Money Laundering

Key Points:

• The EBA issues EU-wide guidance for crypto firms on anti-money laundering, seeking uniformity in compliance.
• The agency highlights heightened risks in crypto-asset transfers, emphasizing the necessity for CASPs to adopt effective risk-mitigation measures.
• EBA crypto guidelines, aligning with global standards, accompany recent EU legislation set to be enforced on December 30.

The European Banking Authority (EBA) has issued crucial guidance aimed at fostering compliance among crypto firms with anti-money laundering and terrorist financing requirements.

EBA Crypto Guidelines to Prevent Money Laundering for EU Crypto Firms

The EBA’s objective is to standardize the approach adopted by crypto asset service providers (CASP) across the European Union to counter financial crimes effectively.

Highlighting the heightened risk factors associated with crypto-asset transfers, the EBA stressed the potential increase in illicit activities due to the speed of transactions and the presence of anonymity features in certain products. The regulatory body emphasizes the importance of CASPs being aware of these risks and implementing robust measures to mitigate them.

This move by the EBA follows the EU’s recent finalization of legislation concerning digital asset fund transfers, complementing its landmark Markets in Crypto Assets (MiCA) regulatory package. The EBA has already published guidelines on risk-based supervision for CASPs and is actively seeking input on proposed guidelines to prevent the misuse of crypto transfers. These EBA crypto guidelines align with recommendations from the Global Financial Action Task Force (FATF).

Additionally, the agency is in consultation regarding further guidance pertaining to the internal policies and controls that CASPs should have. Recognizing the interconnected nature of the financial sector, the EBA crypto guidelines also extend to other credit and financial institutions having CASPs as clients or being exposed to crypto assets.

The EBA crypto guidelines are set to come into effect on December 30, coinciding with the full implementation of the MiCA regulatory package. Competent authorities have a two-month window to report their compliance with the new guidelines. This comprehensive approach underscores the EBA’s commitment to fostering a secure and regulated environment within the rapidly evolving landscape of crypto assets.