Key takeaways:
- The EBA announced the expansion of Travel Rules rules to include crypto service providers and their intermediaries, a major step in strengthening AML procedures.
- It will be necessary for crypto service providers and intermediaries to disclose their policies on cross-border transfers and multi-intermediation.
The European Banking Authority (EBA) announced the expansion of Travel Rules rules to include crypto service providers and their intermediaries, a major step in strengthening Anti-Money Laundering (AML) procedures.
Regulation (EU) 2023/1113 (Travel Rule guidelines) will take effect on December 30 for crypto exchanges operating in the European Union. This regulation requires the exchanges to publish information on fund and crypto asset transfers.
Consequently, the EU’s Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) framework will apply to crypto asset service providers (CASPs), as defined under the EU’s Markets in Crypto-Assets Regulation (MiCA).
Payment service providers (PSPs), intermediary PSPs, CASPs, and intermediary CASPs will have two months to declare compliance with the new regulations after the rule takes effect.
“The deadline for competent authorities to report whether they comply with the Guidelines will be two months after the publication of the translations.”
Among the general provisions include gathering user data for the purpose of transferring money or crypto assets, determining if the transaction is connected to the purchase of services, and identifying transactions that seem connected.
Furthermore, it will be necessary for crypto service providers and intermediaries to disclose their policies on cross-border transfers and multi-intermediation.
The European Bank for Acceptance (EBA) has admitted that crypto exchanges and service providers may face financial strain in order to comply with EU Travel Rule advice. On the other hand, the regulatory body expects long-term overall benefit.
“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.”
The applicable AML/CFT regulations “will continue to apply” to crypto exchanges and service providers that are currently covered by the EU’s Anti-Money Laundering Directive (AMLD) or a domestic AML/CFT regime.
Crypto protocols are being proactive in their approach to compliance, even as European governments tighten their control over crypto exchange activity.
Sustainability metrics for the Cardano network that will abide by EU MiCA laws were produced by the Cardano Foundation in collaboration with the Crypto Carbon Ratings Institute.
The paper emphasizes that compared to proof-of-work techniques, Cardano uses substantially less electricity and operates on a consensus system that is more energy-efficient.
Among other crucial indicators, it offers the Cardano network’s total annualised electricity consumption, carbon footprint, and marginal power demand per transaction per second.
