EBA Cracks Down on Crypto Misuse with New Guidelines

The European Banking Authority (EBA) has initiated a public consultation on its latest guidelines to prevent the misuse of funds and the transfer of certain crypto-assets for money laundering and terrorist financing.

With all that is happening in the crypto world lately, this seems like a smart move. Read on for more details.

What Are the Guidelines About?

These proposed “travel rule” guidelines outline the responsibilities of Payment Service Providers (PSPs), Intermediary PSPs (IPSPs), Crypto-Asset Service Providers (CASPs), and Intermediary CASPs (ICASPs). What’s on their to-do list? Spot any missing or incomplete info with fund or crypto-asset transfers and set up solid procedures to manage transactions without proper documentation.

The EBA’s initiative aims to foster a shared understanding and ensure the consistent application of EU law, reinforcing the anti-money laundering and counter-terrorism financing (AML/CFT) system across the EU. Stakeholders are invited to provide feedback on these guidelines until February 26, 2024.

No More Sneaky Moves!

The primary objective of these guidelines is to halt the flow of money and crypto-assets used for financing terrorism and other financial crimes. By enabling full traceability of these transfers, authorities will be better equipped to prevent, detect, or investigate such illicit activities.

The EBA advocates for a unified approach among PSPs, IPSPs, CASPs, ICASPs, and other relevant authorities across the EU. This approach involves establishing best practices for handling and identifying transfers of money and crypto-assets that lack essential information about the payer/originator and the payee/beneficiary.

Heading toward a Safer Crypto World

By creating a standardized framework for information sharing and cooperation, these guidelines aim to improve the efficiency of tracking suspicious transfers, thereby enhancing the security and integrity of financial transactions within the EU.