EBA Proposes New Rules to Strengthen AML/CFT Compliance for Crypto-Asset Service Providers
EBA Proposes New Rules to Strengthen AML/CFT Compliance for Crypto-Asset Service Providers
The European Banking Authority (‘EBA’) has initiated a public consultation on the proposed Regulatory Technical Standards (‘RTS’) designed to strengthen efforts against money laundering and terrorist financing within the European Union.
These standards focus on requiring crypto-asset service providers (‘CASPs’) to designate a central contact point (‘CCP’) to ensure adherence to local anti-money laundering and counter-terrorism financing (‘AML/CFT’) regulations. The consultation, which is open until 4 February 2025, invites feedback from stakeholders in the financial and crypto asset industries.
Addressing AML/CFT Challenges
CASPs offering services in EU Member States through entities other than branches, must adhere to local AML/CFT regulations. However, these entities are not always classified as "obliged entities," creating challenges for local authorities in conducting effective supervision. To address this oversight, the EBA has proposed new RTS, which include:- Criteria for Determining Need: Guidelines for identifying situations were appointing a CCP is essential to ensure AML/CFT compliance.
- Functions of Central Contact Points: Clear definitions of CCP roles and responsibilities to ensure effective oversight.
The EBA’s proposed approach builds upon existing regulations for electronic money issuers (‘EMIs’) and payment service providers (‘PSPs’), as outlined in Commission Delegated Regulation (EU) 2018/1108. The proposed standards aim to maintain the established principles for EMIs and PSPs while extending relevant provisions to CASPs. To ensure an effective and tailored regulatory structure, the EBA shall introduce new provisions tailored to the unique characteristics of CASPs, taking into account their distinct business models and operations.
Key Deadlines and Participation
The EBA invites interested stakeholders to participate in the consultation process by submitting their feedback through its website by 4th of February 2025. Following the consultation period, all submissions will be published publicly unless confidentiality is specifically request.
Regulatory Context
The draft RTS are based on amendments introduced by Regulation (EU) 2023/1113 to Directive (EU) 2015/849. These amendments, effective from 30 December 2024, extend the scope of AML/CFT obligations to encompass CASPs, in addition to EMIs and PSPs. To align with these changes, the EBA is updating the existing regulatory framework to address the evolving financial landscape and strengthen the EU’s efforts to combat financial crime.
What This Means for CASPs
With the rapid expansion of the crypto-asset sector, the proposed RTS represents a pivotal move toward harmonising regulatory standards with the unique challenges posed by digital assets. CASPs operating across EU Member States must evaluate their current compliance frameworks and prepare to meet new requirements, including the potential requirement to appoint a CCP in host Member States.Stakeholders are strongly encouraged to participate in the consultation process to help shape the final standards that address the practical complexities of operating within the EU’s diverse regulatory environment.