EU extends guidelines on ML/TF for crypto companies

We’ve written before that the European Banking Authority (EBA) has published new guidelines for crypto-asset service providers (CASPs). The EBA extended its Guidelines on money laundering and terrorist financing risk factors to include CASPs, highlighting the ML/TF risk factors and mitigating measures that CASPs need to consider.

The guidelines include detailed risk assessment directives for CASPs, particularly focusing on the potential dangers associated with various features of crypto-assets, such as rapid transfers and features that conceal user identities. The guidelines aim to equip CASPs with the knowledge and tools to identify and effectively manage their exposure to ML/TF risks.

The new sector-specific risk factors that may indicate the CASP’s exposure to higher or lower ML/TF risk include:

• Transactions to Self-Hosted Addresses: Transactions to or from self-hosted addresses are considered higher risk, requiring enhanced due diligence.

• Privacy-Enhancing Features: Products that contain anonymity-enhancing features or allow transfers to and from self-hosted and decentralized trading platforms are considered higher risk.

• Customer Behavior: Inconsistent or incorrect information provided by customers, transaction volumes or patterns that are not in line with those expected from the type of customer, and links to high-risk jurisdictions are all considered higher risk.

• Rapid Transfers: Rapid transfers of crypto-assets across the world are considered higher risk.

• Mixers and Tumblers: The use of mixers and tumblers is considered higher risk.

The guidelines are expected to apply from 30 December 2024. The EBA has also issued a public consultation for EU’s member states on new guidelines on preventing the abuse of funds and certain crypto-asset transfers for money laundering and terrorist financing purposes, in line with the Markets in Crypto-Assets Regulation (MiCA). The consultation is open until 26 February 2024.

The European Banking Authority (EBA) is an independent EU authority that works to ensure effective regulation and supervision of all banking entities located or operating in the European Union. Its overall objectives are to maintain financial stability in the EU and to safeguard the integrity, efficiency, and orderly functioning of the banking sector. The EBA has the power to overrule national regulators if they fail to adequately regulate banks in their jurisdiction. It also contributes to developing a framework for dealing with a failing bank or investment firm and oversees the Standing Committee on AML/CFT.

By the way, you can always check a crypto address using TokenScope for specific risk factors by clicking on the «Request address report» button on the address page.