EBA to extend EU Travel Rule to crypto exchanges starting from December

In
a
bid
to
enhance
Anti-Money
Laundering
(AML)
measures,
the

European
Banking
Authority

(EBA)
has
expanded
Travel
Rules
guidelines
to
include
crypto
service
providers
and
their
intermediaries.

Starting
December
30,
crypto
exchanges
in
the
EU
will
need
to
comply
with
Regulation
(EU)
2023/1113,
which
requires
them
to
report
information
on
fund
and
crypto
asset
transfers.

Crypto
asset
service
providers
(CASPs),
under
the
EU’s
Markets
in
Crypto-Assets
Regulation
(MiCA),
will
also
be
subject
to
the
EU’s
Anti-Money
Laundering/Countering
the
Financing
of
Terrorism
(AML/CFT)
framework.

Payment
service
providers
(PSPs),
intermediary
PSPs,
CASPs,
and
intermediary
CASPs
will
have
two
months
to
declare
their
compliance
with
the
new
rules.

Crypto
service
providers
must
collect
user
information
for
fund
or
crypto
transfers,
identify
service-related
transactions,
and
detect
linked
transfers.
They
will
also
need
to
declare
their
policies
on
multi-intermediation
and
cross-border
transfers.

The
EBA
recognizes
that
crypto
exchanges
and
service
providers
might
undergo
financial
stress
in
a
bid
to
attain
compliance
with
the
EU
Travel
Rule
guidance. 

However,
the
financial
regulatory
body
noted
a
silver
lining:

“Overall,
the
benefits
from
these
Guidelines
are
expected
to
outweigh
potential
costs,
and
these
Guidelines
are
expected
to
contribute
to
making
the
fight
against
ML/TF
more
effective.”

Crypto
exchanges
and
service
providers
under
the
EU’s
Anti-Money
Laundering
Directive
(AMLD)
or
a
domestic
AML/CFT
regime
will
still
need
to
follow
the
relevant
AML/CFT
requirements.

As
governments
across
the
globe
tighten
regulations
on
crypto
exchanges,
crypto
protocols
are
actively
working
on
compliance
measures.

In
March,
the
world’s
largest
crypto
exchange,

Binance,
joined
the
Global
Travel
Rule
alliance

to
combat
financial
crimes
like
money
laundering
and
terrorist
financing.

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