The European Union's banking regulator on Tuesday issued guidance for cryptocurrency companies to comply with anti-money laundering and counter-terrorism financing requirements.
The European Banking Authority (EBA) said in a press release that, by expanding the scope of its existing measures to cover cryptocurrencies, it is “harmonizing the approach” that cryptoasset service providers (CASPs) across the EU must adopt to combat financial crime.
“The risks of this occurring can be increased, for example due to the speed of transfer of crypto assets or because some products contain features that hide the identity of the user. Therefore, it is important that CASPs know these risks and take measures to effectively mitigate them,” the statement said.
Last year, the European Union finalized legislation on money transfer via digital assets along with a landmark regulatory package for Markets in Cryptoassets (MiCA). The EBA has since published guidelines on risk-based supervision of CASPs and is consulting on proposed guidelines to prevent the abuse of cryptocurrency transfers that are in line with the recommendations of the global watchdog, the Financial Action Task Force (FATF). It also consults on further guidance on the policies and internal controls CASPs should have in place.
“Given the interconnectedness of the financial sector, the new guidelines also include guidance directed at credit and other financial institutions that have CASPs as their clients or that have exposure to cryptocurrency assets,” the EBA said.
Competent authorities must report whether they comply with the new guidelines within two months of the publication of the guidelines translated into the official languages of the European Union. The guidelines will apply from 30 December, at which time MiCA becomes fully effective.
