EBA ( European Banking Authority ) plans to include crypto-asset service providers (CASPs) within the scope of its proposed amendments. The consultation, which is open until 31 August 2023, invites feedback on the significant ML/TF risks that CASPs and other financial institutions may face.
CASPs have a higher risk profile due to their use of innovative technologies, enabling instant worldwide transfers of crypto assets and services with privacy-enhancing features. The proposed amendments by European Banking Authority aim to establish common regulatory expectations, ensuring CASPs implement effective measures to identify and mitigate these risks.
The proposed changes introduce sector-specific guidance for CASPs, outlining factors that indicate higher or lower ML/TF risk exposure. CASPs should consider these factors during their initial and ongoing ML/TF risk assessments of their business and customers. The guidelines also detail how CASPs should customize their customer due diligence (CDD) procedures to align with these risks. Furthermore, the proposed amendments provide guidance to other financial institutions regarding the risks associated with engaging with CASPs or dealing with crypto assets.
EBA plans to offer additional guidance to AML/CFT supervisors of CASPs through amendments to its risk-based supervision Guidelines, open for consultation until 29 June 2023. The EBA will supplement these amendments with new guidelines that address the prevention of fund transfer misuse for ML/TF purposes and establish policies and procedures for compliance with restrictive measures.
Interested parties can submit comments on the consultation paper via the EBA’s consultation page until the deadline of 31 August 2023. A virtual public hearing on the consultation paper is scheduled for 7 June 2023.