Regulation
EBA to extend EU travel rule to cryptocurrency exchanges from December
In a bid to strengthen anti-money laundering (AML) measures, the European Banking Authority (EBA) has expanded the travel rules guidelines to include crypto service providers and their intermediaries.
From December 30, EU cryptocurrency exchanges will have to comply with Regulation (EU) 2023/1113, which requires them to report information on transfers of funds and crypto assets.
Crypto Asset Service Providers (CASPs), under the EU Markets in Crypto-Assets (MiCA) Regulation, will also be subject to the EU Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) framework.
Payment service providers (PSPs), intermediary PSPs, CASPs and intermediary CASPs will have two months to declare their compliance with the new rules.
Cryptocurrency service providers must collect user information for fund or cryptocurrency transfers, identify service-related transactions, and detect related transfers. They will also need to declare their policies on multi-intermediation and cross-border transfers.
The EBA acknowledges that cryptocurrency exchanges and service providers may face financial difficulties in complying with EU travel guidelines.
However, the financial regulator noted a glimmer of hope:
“Overall, the benefits of these guidelines should outweigh the potential costs and they should contribute to making the fight against money laundering and terrorist financing more effective.”
Cryptocurrency exchanges and service providers subject to the EU Anti-Money Laundering Directive (AMLD) or a national AML/CFT regime will still need to follow relevant AML/CFT requirements.
As governments around the world tighten regulations on cryptocurrency exchanges, cryptocurrency protocols are actively working on compliance measures.
In March, the world’s largest cryptocurrency exchange, Binance Joins Global Travel Rule Alliance to combat financial crimes such as money laundering and terrorist financing.