European Bank Authority Issues AML CFT Guidelines for Crypto-asset Service Providers

November 28, 2023

The European Bank Authority (EBA) has extended its supervision guidelines for risk-based anti-money laundering and counter-terrorist financing (AML/CFT) to encompass supervisors managing crypto-asset service providers (CASPs). The updated guidelines indicate the expectations of measures that supervisors should adopt to detect money laundering and terrorist financing risks in the crypto sector, as per EBA press release. The guidelines also serve as a crucial step in the European Union’s fight against financial crime.

CASPs can pose high ML/TF risks as they operate at international levels, that’s why a supervisory approach to tackle such risks in the sector is crucial. By extending AML/CFT supervision guidelines to CASPs, EBA promotes a comprehensive understanding of the risk-based approach to AML/CFT supervision for CASPs across all member states ensuring smooth implementation.

Risk-based Approach and Guidelines for CASPs

The updated amendments also provide guidelines on the specific source of information that competent authorities should consider while evaluating money laundering and terrorist financing risks associated with CASPs. They also shed light on the significance of a consistent approach in defining supervisory expectations, specifically when multiple competent authorities are supervising the same institution.

Moreover, the guidelines also stress upon the importance of training to equip staff of competent authorities with technical skills and expertise for effective performance.

The extended guidelines will be translated into official EU language and a consolidated version will be available on the EBA website. The competent authorities are required to confirm compliance with the guidelines within two months after the EU translated guidelines are made public. The implementation of the guidelines will commence on 30 December 2024.

Also read: Risk-based approach in KYC/AML