On Tuesday, the financial authority of the European Union released guidelines for cryptocurrency companies to adhere to its anti-money laundering and anti-terror funding mandates.The European Banking Authority (EBA) stated in a news release that by broadening the scope of its current regulations to include cryptocurrency, it “harmonizes the approach” that crypto asset service providers (CASP) throughout the EU should take to combat financial crime.
“The risks of this happening can be increased, for example because of the speed of crypto-asset transfers or because some products contain features that hide the user’s identity. Therefore, it is important that CASPs know about these risks and put in place measures that effectively mitigate them,” the statement said.
Along with its historic Markets in Crypto Assets (MiCA) legislative package, the EU last year completed laws governing the transfer of funds via digital assets.Since then, the Financial Action Task Force (FATF), a global watchdog, has recommended changes to the proposed guidelines to prevent the exploitation of cryptocurrency transactions. The EBA has produced guidelines on risk-based supervision of CASPs and is currently consulting on these changes.Further recommendations regarding the internal policies and controls that CASPs ought to have are also being consulted.
“Given the interdependence of the financial sector, the new Guidelines also include guidance addressed to other credit and financial institutions that have CASPs as their customers or which are exposed to crypto assets,” the EBA said.
Within two months of the rules being published and translated into the official languages of the EU, competent authorities are required to report on their compliance with the new standards.The rules will go into force on December 30, which is also when MiCA fully kicks in.