Regulation
Europe Updates Travel Rule to Include Crypto Service Providers in Anti-Money Laundering Push
The European Banking Authority (EBA) has updated its Travel Rule guidelines to include crypto service providers and intermediaries, according to a July 4 release. declaration.
Starting December 30, 2024, cryptocurrency exchanges in the European Union will have to follow the Travel Rule guidelines (EU-2023/1113). The regulation requires exchanges to report information on transfers of funds and cryptocurrencies. It specifies the information required for transfers and how to detect and handle missing data.
This update is part of the EU’s efforts to combat money laundering and terrorist financing. The EBA aims to ensure the traceability of asset transfers for investigations. Once implemented, payment service providers (PSPs), intermediary PSPs, cryptocurrency service providers (CASPs) and intermediary CASPs will have two months to comply.
EBA declared:
“The deadline for competent authorities to communicate whether they comply with the Guidelines will be two months after the publication of the translations in the official EU languages.”
The guidelines also require collecting user information to identify whether transactions are service-related or linked to other transfers. Crypto service providers must also announce their policies on cross-border transfers.
The EBA argues that the guideline offers long-term benefits. It supports the EU Cryptocurrency Markets Regulation (MiCA) and aims to create unified regional regulations. Overall, it is expected to limit money laundering and counter-terrorism financing in the EU. The regulator added:
“Its main objective is to make it more difficult to misuse funds and certain cryptocurrency transfers for terrorist financing and other financial crime purposes and to enable competent authorities to fully trace such transfers where this is necessary to prevent, detect or investigate money laundering and terrorist financing (ML/TF).”
The update to the Travel Rule guidelines comes as the second phase of the MiCA regulation approaches. While the first phase, focusing on stablecoinsis already in force. The second phase, aimed cryptocurrency service providerswill start by the end of the year.