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). This strategic initiative marks a
significant step in the EU’s ongoing battle against illicit financial
activities. As crypto-assets become increasingly susceptible to misuse for
criminal purposes, the EBA’s guidelines aim to equip CASPs with the knowledge
and tools to identify and mitigate these risks effectively.
The EBA’s guidelines shed light on the specific risks faced
by CASPs, emphasizing factors such as the rapidity of crypto-asset transfers
and features that conceal user identities. These risks necessitate a
comprehensive understanding, prompting the EBA to provide a non-exhaustive list
of factors indicating exposure levels to ML and TF risks. CASPs are urged to delve
into their customer base, product offerings, delivery channels, and
geographical locations to pinpoint vulnerabilities.
To counteract these risks, the CASPs are encouraged to
adjust their mitigating measures, with a special emphasis on the use of
blockchain analytics tools. The guidelines provide a roadmap for CASPs to
tailor their strategies based on the identified risk factors, creating a robust
defense against potential money laundering and terrorism financing activities.
We have extended our Guidelines on money laundering (ML) and terrorist financing (TF) risk factors to #crypto-asset service providers (CASPs).
🏹Aim: help CASPs identify these risks by providing a non-exhaustive list of different factorshttps://t.co/YCHJdOGvj2 pic.twitter.com/jTeDNIhX9f
— EU Banking Authority – EBA 🇪🇺 (@EBA_News) January 16, 2024
Due to the interconnected nature of the financial sector,
the guidelines extend to other credit and financial institutions that engage
with CASPs or have exposure to crypto assets. The risk escalates when
institutions form business relationships with non-authorized crypto-asset
service providers. The EBA’s comprehensive approach ensures a cohesive strategy
across the financial landscape.
The extension of the ML and TF Risk Factors Guidelines aligns
CASPs across the EU, harmonizing their approach to implementing the risk-based
strategy for anti-money laundering and countering the financing of terrorism. This harmonization is vital for fostering a united front against
financial crime.
Expect ongoing updates as this story evolves.
The European Banking Authority (EBA) has extended…
