EU Watchdog Extends AML Guidelines to Crypto Firms, Mandates Financial Crime Measures
The European Union has expanded its Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) guidelines to encompass European cryptocurrency companies.
The decision, announced by the European Banking Authority (EBA) on January 16, seeks to assist crypto asset service providers (CASPs) in identifying their exposure risk to financial crimes, considering factors such as customers, products, delivery channels, and geographical locations.
The amended guidelines also provide insights into how crypto firms should adapt their measures to combat financial crimes, including the potential use of blockchain analytics tools.
Effective since December 30, these guidelines mark a crucial step in the EU’s ongoing efforts against financial crime, harmonizing the approach for crypto firms across the union to combat money laundering and terrorist financing.
The updated guidelines introduce specific risks and guidance tailored to cryptocurrencies and crypto companies, offering comprehensive advice to financial institutions dealing with cryptocurrencies or serving crypto-related entities.
Notably, the guidance includes instructions for crypto firms to assess the financial crime risks associated with features such as anonymity enhancements, self-hosted wallets, decentralized platforms, and products facilitating transfers between the company and such services.
This comes as the EU’s finalization of the Transfer of Funds Regulation (ToFR) governing crypto transfers and the comprehensive crypto Markets in Crypto-Assets (MiCA) regulations.
While MiCA’s crypto investor protections are set to become effective in December, EU member states have the option to implement an 18-month transitional period for CASPs, allowing them to operate without a license during this time.
