EU Expands AML Guidelines to Include Crypto Service Providers

In an effort to enhance Anti-Money Laundering (AML) measures, the European Banking Authority (EBA) has expanded Travel Rules guidelines to include crypto service providers and their intermediaries. Starting December 30, crypto exchanges in the EU will need to comply with Regulation (EU) 2023/1113, which mandates reporting information on fund and crypto asset transfers.

Crypto asset service providers (CASPs), under the EU’s Markets in Crypto-Assets Regulation (MiCA), will also be subject to the EU’s Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) framework. Payment service providers (PSPs), intermediary PSPs, CASPs, and intermediary CASPs will have two months to declare their compliance with the new rules.

The EBA has just published new guidelines on the information that should accompany transfers of funds and certain crypto assets.

Crypto service providers must collect user information for fund or crypto transfers, identify service-related transactions, and detect linked transfers. They will also need to declare their policies on multi-intermediation and cross-border transfers.

Crypto exchanges and service providers under the EU’s Anti-Money Laundering Directive (AMLD) or a domestic AML/CFT regime will still need to follow the relevant AML/CFT requirements. The EBA recognizes that crypto exchanges and service providers might face financial stress to attain compliance with the EU Travel Rule guidance. However, the financial regulatory body noted:

“Overall, the benefits from these Guidelines are expected to outweigh potential costs, and these Guidelines are expected to contribute to making the fight against ML/TF more effective.”

As governments worldwide tighten regulations on crypto exchanges, crypto protocols are actively working on compliance measures. In March, the world’s largest crypto exchange joined the Global Travel Rule alliance to combat financial crimes like money laundering and terrorist financing.

For more updates on the latest crypto regulations and compliance measures, stay tuned to Global Crypto News.