The
European Banking Authority (EBA) has extended its guidelines on money
laundering (ML) and terrorist financing (TF) risk factors to crypto-asset
service providers (CASPs). The move aims to help the nascent crypto sector
tackle illicit finance risks and is the next step after the introduction of
cryptocurrency legislation in May last year.
The new
guidelines list risk factors and mitigation measures that CASPs should consider
when developing anti-money laundering (AML
Anti-Money Laundering (AML)
Anti-money laundering (AML) is a term that describes laws, processes, and regulations that are intended to prevent illegally obtained funds from being disguised as income gained through legitimate means. The fundamental purpose of the AML laws is to help safeguard, detect, and report suspicious activity including the predicate offenses to money laundering and terrorist financing, such as securities fraud and market manipulation.Most exchanges have AML measures that include identity verification
Anti-money laundering (AML) is a term that describes laws, processes, and regulations that are intended to prevent illegally obtained funds from being disguised as income gained through legitimate means. The fundamental purpose of the AML laws is to help safeguard, detect, and report suspicious activity including the predicate offenses to money laundering and terrorist financing, such as securities fraud and market manipulation.Most exchanges have AML measures that include identity verification
Read this Term) and countering terrorism financing
(CTF) policies. These include assessing risks from customers, products,
transactions, and jurisdictions.
“CASPs can
be abused for financial crime purposes, including ML and TF,” the authority
commented. “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.”
The
guidelines explain how CASPs can adjust controls like transaction monitoring,
blockchain analytics, and enhanced due diligence. They also cover managing
risks from self-hosted wallets.
Advice for
banks highlights the dangers of dealing with unregulated crypto firms. This
risk escalates where traditional financial institutions have customers active
in crypto-assets.
Complying With Tighter
Regulation
The move
comes as the EU brings CASPs into its AML/CTF regulatory perimeter. Recently
approved laws like the Markets in Crypto Assets (MiCA) require crypto firms to
meet strict AML and CTF rules. However,
the European Securities and Markets Authority warned yesterday (Tuesday) that
MiCA is “no safe harbour” and crypto assets still remain “highly volatile and
speculative.”
Markets in Crypto-Assets Regulation 🙊 Why should you #BeCryptoAware? What’s ESMA’s role?
Consumers face risks when investing in #CryptoAssets or consuming crypto services.#MiCA is no safe harbour. Crypto assets remain highly volatile and speculative.https://t.co/CYVPFJgIZx pic.twitter.com/vWGKR3vaQV
— ESMA – EU Securities Markets Regulator 🇪🇺 (@ESMAComms) January 16, 2024
National
regulators must confirm whether they comply with the new MiCA-related
guidelines within two months of translations being published, likely by
end-2024. The measures themselves take effect from 30 December 2024.
The EBA
said extending its risk factor guidelines represents “an important step
forward in the EU’s fight against financial crime” in crypto-assets. The
sector’s growth has raised policymaker concerns globally about illicit usage.
The
regulation of cryptocurrencies
Cryptocurrencies
By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw
By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw
Read this Term was also announced a few days ago by Poland, one
of the EU countries. The local financial supervisory authority is expected to
start controlling this market at the end of 2024.
The
European Banking Authority (EBA) has extended its guidelines on money
laundering (ML) and terrorist financing (TF) risk factors to crypto-asset
service providers (CASPs). The move aims to help the nascent crypto sector
tackle illicit finance risks and is the next step after the introduction of
cryptocurrency legislation in May last year.
The new
guidelines list risk factors and mitigation measures that CASPs should consider
when developing anti-money laundering (AML
Anti-Money Laundering (AML)
Anti-money laundering (AML) is a term that describes laws, processes, and regulations that are intended to prevent illegally obtained funds from being disguised as income gained through legitimate means. The fundamental purpose of the AML laws is to help safeguard, detect, and report suspicious activity including the predicate offenses to money laundering and terrorist financing, such as securities fraud and market manipulation.Most exchanges have AML measures that include identity verification
Anti-money laundering (AML) is a term that describes laws, processes, and regulations that are intended to prevent illegally obtained funds from being disguised as income gained through legitimate means. The fundamental purpose of the AML laws is to help safeguard, detect, and report suspicious activity including the predicate offenses to money laundering and terrorist financing, such as securities fraud and market manipulation.Most exchanges have AML measures that include identity verification
Read this Term) and countering terrorism financing
(CTF) policies. These include assessing risks from customers, products,
transactions, and jurisdictions.
“CASPs can
be abused for financial crime purposes, including ML and TF,” the authority
commented. “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.”
The
guidelines explain how CASPs can adjust controls like transaction monitoring,
blockchain analytics, and enhanced due diligence. They also cover managing
risks from self-hosted wallets.
Advice for
banks highlights the dangers of dealing with unregulated crypto firms. This
risk escalates where traditional financial institutions have customers active
in crypto-assets.
Complying With Tighter
Regulation
The move
comes as the EU brings CASPs into its AML/CTF regulatory perimeter. Recently
approved laws like the Markets in Crypto Assets (MiCA) require crypto firms to
meet strict AML and CTF rules. However,
the European Securities and Markets Authority warned yesterday (Tuesday) that
MiCA is “no safe harbour” and crypto assets still remain “highly volatile and
speculative.”
Markets in Crypto-Assets Regulation 🙊 Why should you #BeCryptoAware? What’s ESMA’s role?
Consumers face risks when investing in #CryptoAssets or consuming crypto services.#MiCA is no safe harbour. Crypto assets remain highly volatile and speculative.https://t.co/CYVPFJgIZx pic.twitter.com/vWGKR3vaQV
— ESMA – EU Securities Markets Regulator 🇪🇺 (@ESMAComms) January 16, 2024
National
regulators must confirm whether they comply with the new MiCA-related
guidelines within two months of translations being published, likely by
end-2024. The measures themselves take effect from 30 December 2024.
The EBA
said extending its risk factor guidelines represents “an important step
forward in the EU’s fight against financial crime” in crypto-assets. The
sector’s growth has raised policymaker concerns globally about illicit usage.
The
regulation of cryptocurrencies
Cryptocurrencies
By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw
By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw
Read this Term was also announced a few days ago by Poland, one
of the EU countries. The local financial supervisory authority is expected to
start controlling this market at the end of 2024.