Navigating the updated EBA Guidelines on AML/CFT requirements and the CASP key considerations
While the Crypto-Asset Services Providers (CASP) are expecting their European Regulatory Framework to come into force end of 2024, the European Banking Authority (EBA) introduces guidelines on Anti-Money Laundering and Combatting the Financing of Terrorism (AML/CFT) regulatory requirements. Recognising the pressing need to cultivate a strong compliance culture within this emerging sector, competent authorities, and particularly the EBA, have taken a major step forward.
Within 2021, the EBA issued the Guidelines on the Money Laundering and Terrorist Financing (ML/TF) Risk Factors. Comprised of 20 Guidelines, the report focuses on Customer Due Diligence and the factors credit and financial institutions shall consider when assessing their ML/TF risk. This risk can be either associated with the establishment of an individual business relationship or the execution of occasional transactions.
Fast forward to mid-2023, considering the imperative need to minimise the legislative gap of CASP entities within the AML/CFT sector, the EBA in its wisdom has issued a Consultation Paper for the enhancement of the said Guidelines. The Consultation Paper makes a few amendments to the Guidelines and most importantly adds another Guideline, dedicated to forming the AML/CFT framework for EU CASP entities.
Considering the sui generis nature of the Crypto Asset Service Providers, they shall be cautious about the risks they attract. Due to the idiosyncrasy of their business model, it enables instant transfers of crypto assets globally that increase the ML/TF risks. Furthermore, it gives them the opportunity to accept customers from various jurisdictions and execute transactions with high levels of anonymity. In the below commentary, the SALVUS Crypto-Assets Licensing team discusses:
- The challenges arising from the CASP sector
- The need for measures to be introduced along with practical examples
- The next steps forward
- How SALVUS can help with the fulfilment of your CASP requirement
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Find the full article here: https://salvusfunds.com/2024/01/08/navigating-the-updated-eba-guidelines-on-aml-cft-requirements-and-the-casp-key-considerations/
