EU Banking Authority Plans to Update AML/CFT Rules for Crypto Companies

Legal regulations are still a hot topic in the cryptocurrency market. According to the European Banking Authority (EBA), the legal banking regulatory agency under the European Union, plans are underway to update the existing legal rules on money laundering crimes and focus on the fight against terrorist financing (AML/CFT) for companies providing crypto services.

Report on Cryptocurrencies by EBA Officials

In a consultation report released to the public on November 24, the EBA stated that the current EU legal regulations are no longer sufficient for crypto companies to comply with AML/CFT standards. The proposed new industry guidelines aim to address these issues, and the EBA has given relevant parties until February 26, 2024, to submit detailed reports during this process.

The EBA took a notable step by proposing the merger of AML/CFT criteria for payment service providers (PSPs) and crypto asset service providers (CASPs). Furthermore, it is planned to introduce the obligation to enhance the interoperability of their protocols, ensuring the uninterrupted and collaborative transmission of information to CASPs in the future.

According to the proposed new rules, CASPs will also need to acquire information about self-hosted addresses, store this information, enable individual identification of transfers made through crypto assets, and verify whether the address belongs to the CASP customer and is controlled by the CASP customer.

Noteworthy Details in the Process

These requirements will come into effect when the transfer amount in the account held by companies exceeds the limit of 1000 euros. However, the EBA did not specify in the shared report whether this is a monthly, daily, or one-time limit. After the consultation process, the new guidelines are planned to be implemented in the European Union on December 30, 2024.

Last month, EBA officials also published a consultation paper evaluating the suitability of members of the management body and shareholders or qualified shareholders of asset-referenced tokens (ART) and crypto asset service providers (CASP) issuers. In July, the institution took a step in this regard by encouraging stablecoin issuers to voluntarily comply with specific guiding principles on risk management and consumer protection.

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