Crypto exchanges are subject to EU travel legislation within 6 months.
In a significant move to strengthen anti-money laundering (AML) measures, the European Banking Authority (EBA) has announced the extension of travel rules guidelines for crypto service providers and their intermediaries.
Crypto exchanges operating in the European Union will be subject to Regulation (EU) 2023/1113 (Transfer Directive) from December 30, which mandates the reporting of transfers of funds and crypto assets.
As a result, crypto asset service providers (CASPs) in EU markets will be subject to the EU Anti-Money Laundering/Terrorism Financing (AML/CFT) regime as defined in the Crypto-Assets Regulation (MiCA).
Impact of EU travel laws on crypto exchange
Once the regulation is issued, payment service providers (PSPs), intermediate PSPs, CASPs and intermediate CASPs will be given a two-month grace period to notify their compliance with the new requirements.
“The deadline for competent authorities to report non-compliance with the guidelines will be two months after the publication of the definitions.”
Some general provisions include collecting information about users transferring financial or crypto assets, identifying whether the transaction is related to the purchase of services, and identifying transfers that appear to be connected.
Additionally, crypto service providers and intermediaries must disclose their policies on multi-intermediation and cross-border transfers.
Planning for long term benefits
The EBA has acknowledged that compliance with the EU's Travel Directive will put crypto exchanges and service providers under financial stress. However, the regulatory agency expects overall benefit in the long run.
“Overall, the benefits of these guidelines are expected to outweigh the costs, and these guidelines are expected to contribute to making the fight against ML/TF more effective.”
Crypto exchanges and service providers that currently fall within the scope of the EU's Anti-Money Laundering Directive (AMLD) or domestic AML/CFT regimes will be “subject to the applicable AML/CFT requirements.”
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As European governments tighten their controls on crypto exchange activities, crypto protocols are taking a proactive approach to compliance.
The Cardano Foundation, in collaboration with the Crypto Carbon Rating Institute, has released indicators for the sustainability of the Cardano network, which complies with the MiCA regulations in the European Union.
The report emphasizes that Cardano runs on a more energy-efficient consensus protocol and consumes less electricity than proof-of-work protocols.
It also provides the Cardano network's total annual electricity consumption and carbon footprint with marginal energy demand per second and other important metrics.
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