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The EU banking authority has unveiled a new set of transfer screening requirements for crypto service providers.
Key Notes
The European Banking Authority has outlined fresh demands for CASPs regarding transfers.The EU continues to fight high-risk ventures and terrorism financing strategies.The latest crypto regulation updates seek to complement MiCA.The European Union (EU) has created new rules for crypto asset service providers (CASPs) and payment service providers (PSPs) to ensure they follow stricter compliance measures. The European Banking Authority (EBA) led this effort to help these companies align their operations with the EU’s strict regulations.
According to the release, these guidelines focus on following the EU’s sanctions rules. A key requirement is for these service providers to set up strong transfer screening systems. These systems should help monitor and enforce sanctions and other restrictive measures effectively.
EU Crypto Guidelines to Protect Its Financial System
The guidelines stress the importance of thorough checks when handling CASP transactions. Crypto companies must use advanced tools to monitor transactions for any possible violations of EU sanctions. This helps reduce risks linked to illegal activities, like money laundering or financing terrorism. Undoubtedly, these requirements show the EU’s dedication to keeping its financial system safe, especially as the crypto market grows.
Similarly, PSPs will improve their screening processes to stop unauthorized transactions that could go against the EU’s rules. The guidelines stress the importance of clarity and responsibility. As such, PSPs must keep detailed records to show their compliance efforts.
Meanwhile, the EBA’s guidance highlights the increased scrutiny the European crypto industry faces. As more people adopt digital assets, regulators want to address possible weaknesses in the system. The guidelines also aim to protect the EU’s financial system and build trust among consumers and investors. They ensure that crypto transactions are safe and follow the law. According to the report, the guidelines will be effective from December 30, 2025.
These measures come amid increasing global efforts to regulate the crypto industry. By establishing clear rules for CASPs and PSPs, the EU aims to be a leader in creating a safe and well-regulated environment for digital assets.
Recall that last year, the European Systemic Risk Board (ESRB) recommended that European authorities curb leveraged bets on digital assets by introducing investment funds and exchange limits. The ESRB demanded regular reports from companies involved in the crypto sector. They also introduced specific rules for some of the largest players in the space.
European Regulators Finalizes First Rules for CASPs
Some months ago, the European Securities and Markets Authority (ESMA) completed the first set of reports on rules for CASPs under the Market in Crypto Assets Regulations (MiCA). The report includes proposed requirements the EU’s financial markets regulator and supervisor will demand from crypto companies looking to operate in the EU region.
Under the proposed law, the regulator outlined information the CASPs must submit to gain approval to operate in the region. Other requirements include the intent to provide crypto-asset services and how CASPs should address customer complaints.
The report follows the completion of a consultation paper. In June 2023, the EU’s financial markets regulator and supervisor published a consultation paper seeking the stakeholders’ input on its proposed rules for CASPs as part of its efforts to craft an industry-focused guideline.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
Benjamin Godfrey is a blockchain enthusiast and journalist who relishes writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desire to educate people about cryptocurrencies inspires his contributions to renowned blockchain media and sites.
