CASPs must work on protocol-interoperable, self-hosted wallets

The European Banking Authority (EBA), the European Union's banking regulator, wants to amend the current Anti-Money Laundering and Terrorist Financing (AML/CFT) rules for crypto providers.

In the year In a consultation paper published on November 24, the EBA explains that current European rules are no longer sufficient to regulate compliance with AML/CFT standards among crypto providers. The proposed new industry guidelines aim to address these issues, and the EBA has given interested parties until February 26, 2024 to comment.

In particular, EBA AML/CFT suggests unifying standards for payment service providers and crypto asset service providers (CASPs). It also proposes forcing CASPs to “enable data transfer in a seamless and interoperable manner” by increasing the interoperability of their protocols.

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Under the proposed new rule, CASPs will be required to access and maintain information on self-hosted addresses, ensure that transfers of crypto assets are independently traceable, and verify that the address is owned or controlled by the CASP client. These requirements apply when the transfer amount of the self-managed account exceeds the €1,000 mark, although EBA does not specify whether this is a monthly, daily or one-time limit.

After the consultation process, the new guidelines should come into force by December 30, 2024.

In October, the EBA issued a consultation paper for members of the governing body and shareholders or members who have a qualifying stake in asset-referenced tokens and CASPs.

In July, the EBA encouraged stablecoin issuers to voluntarily comply with specific “guiding principles” related to risk management and consumer protection.

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