EBA Expands AML Guidelines to Crypto Companies

The European Union’s banking watchdog, the European Banking Authority (EBA), has decided to extend Anti-Money Laundering (AML) and Counter-Terrorist Financing guidelines to European crypto companies. This decision, announced on Jan. 16, aims to assist crypto asset service providers (CASPs) in identifying their exposure risk to financial crimes based on various factors such as customers, products, delivery channels, and geographical locations.

EBA Adjusting Measures: Crypto Firms Embrace Financial Crime-Fighting Tactics

The EBA emphasized the importance of crypto firms adjusting their financial crime-fighting measures in accordance with the amended guidelines. This adjustment may include incorporating tools like blockchain analytics. Notably, these guidelines came into effect on Dec. 30, 2023.

The EBA asserts that these amendments represent a significant step forward in the European Union’s fight against financial crime. The move is seen as a harmonizing effort, standardizing the approach for crypto firms across the union to better mitigate money laundering and terrorist financing risks.

With the updated guidelines, financial firms holding or serving crypto entities will now need to consider cryptocurrency and crypto company-specific risks. The guidance encompasses aspects such as “anonymity-enhancing features,” self-hosted wallets, decentralized platforms, and products facilitating transfers between the company and related services.

EU’s Recent Crypto Regulations

In 2023, the EU finalized its Transfer of Funds Regulation (ToFR) governing crypto transfers and introduced the comprehensive Markets in Crypto-Assets (MiCA) regulations. MiCA includes investor protections set to be effective in December, with EU member states having the option to implement an 18-month transitional period for CASPs, allowing unlicensed operations during this timeframe. This regulatory landscape reflects the EU’s commitment to fostering a secure environment within the rapidly evolving crypto space.