EU Banking Watchdog Seeks to ‘Harmonize’ AML Measures With Extension to Crypto Firms
Europe’s leading banking entity, the European Banking Authority (EBA), has extended its regulatory reach to cover the cryptocurrency space.
In a blog post dated January 16, the EU banking watchdog announced the release of new guidelines focusing on money laundering and terrorist financing risk factors within the crypto space.
European Banking Authority has extended its Guidelines on money laundering and terrorist financing risk factors to #crypto-asset service providers (#CASPs). https://t.co/3sliClzgwk
— Andrei Burz Pinzaru (@aburzpinzaru) January 16, 2024
Under these guidelines, crypto asset service providers (CASPs) will be required to diligently adhere to existing financial regulatory standards, such as implementing know-your-customer (KYC) measures.
This is aimed at combating anti-money laundering and terrorist financing activities within the burgeoning crypto industry.
The EBA stated that the objective of this move is to “harmonize” existing approaches, ensuring that service providers in the crypto space do not become preferred channels for illicit activities due to their close proximity with traditional counterparts.
The EU regulator also noted that CASPs can be abused for financial crime purposes, including for money laundering (ML) and terrorist financing (TF).
“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 EBA added in its press release.
Given this, all CASPs operating within the European bloc have been given a two-month window to notify the premier banking watchdog
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