EU Banking Authority Includes Cryptocurrency in Updated Anti-Money Laundering Guidelines

Crypto News- The European Union has extended its Anti-Money Laundering and Counter-Terrorist Financing guidelines to include European cryptocurrency companies, according to an announcement from the regional banking watchdog.

On January 16, the European Banking Authority (EBA) revealed that the updated guidelines aim to support crypto asset service providers (CASPs) in evaluating their vulnerability to financial crimes concerning their “customers, products, delivery channels, and geographical locations.”

EU Banking Authority Includes Cryptocurrency in Updated Anti-Money Laundering Guidelines

The guidelines also outline how cryptocurrency companies should adjust their strategies against financial crimes, potentially involving the adoption of “blockchain analytics tools,” as suggested by the watchdog. These guidelines are set to be applicable from December 30, 2023.

The EBA emphasized that these amendments mark a “significant progress in the EU’s battle against financial crime” and seek to “standardize the approach” for crypto firms throughout the union in addressing issues of money laundering and terrorist financing. The revised guidelines will introduce specific risks and recommendations related to cryptocurrency and crypto companies for financial institutions holding or catering to such entities.

EU Strengthens Regulatory Grip: Cryptocurrency Firms Included in Anti-Money Laundering Guidelines

The guidance includes directives for a financial crime risk assessment, instructing crypto firms to scrutinize potential risks associated with features like “anonymity-enhancing features,” self-hosted wallets, decentralized platforms, and products that enable transfers between the company and such services. In 2023, the EU finalized the Transfer of Funds Regulation (ToFR) overseeing crypto transfers and the comprehensive Markets in Crypto-Assets (MiCA) regulations.

MiCA’s measures to protect crypto investors are slated to take effect in December. However, EU member states have the option to implement an 18-month transitional period for CASPs, allowing them to operate without obtaining a license.