Europe updates Travel Rule to include crypto service providers in anti-money laundering push Europe updates Travel Rule to include crypto service providers in anti-money laundering push
EBA enforces stricter oversight on crypto transfers under revised Travel Rule.
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Updated: Jul. 5, 2024 at 3:07 pm UTC
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The European Banking Authority (EBA) has updated its Travel Rule guidelines to include crypto service providers and intermediaries, according to a July 4 statement.
Starting Dec. 30, 2024, crypto exchanges in the European Union must follow the Travel Rule guidelines (EU-2023/1113). The rule mandates that exchanges report information on funds and crypto asset transfers. It specifies the information needed for transfers and how to detect and address missing data.
This update is part of the EU’s efforts to combat money laundering and terrorist financing. The EBA aims to ensure traceability of asset transfers for investigations. Once implemented, payment service providers (PSPs), intermediary PSPs, Crypto-Asset Service Providers (CASPs), and intermediary CASPs will have two months to comply.
EBA stated:
“The deadline for competent authorities to report whether they comply with the Guidelines will be two months after the publication of the translations into the official EU languages.”
The guidelines also require gathering user information to identify if transactions are service-related or linked to other transfers. Crypto service providers must also announce their policies on cross-border transfers.
The EBA argues that the guideline offers long-term benefits. It supports the EU’s Markets in Crypto-Assets (MiCA) regulation and aims to create unified regional regulations. Overall, it is expected to curb money laundering and counter-terrorist financing in the EU. The regulator added:
“Its main objective is to make the abuse of funds and certain crypto-asset transfers for terrorist financing and other financial crime purposes more difficult, and to enable relevant authoritiesto fully trace such transfers where thisis necessary to prevent, detect or investigate money laundering and terrorism financing (ML/TF).”
The Travel Rule guideline update comes as the second phase of the MiCA regulation approaches. While the first phase, focusing on stablecoins, is already in effect. The second phase, targeting crypto asset service providers, will begin by the end of the year.
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