Blockchain
EU Extends Crypto Travel Rules, Mandates Compliance in 6 Months
![eu-extends-crypto-travel-rules,-mandates-compliance-in-6-months](https://theblockchainexaminer.com/wp-content/uploads/2024/07/51605-eu-extends-crypto-travel-rules-mandates-compliance-in-6-months.png)
The European Union (EU) is intensifying its efforts to combat money laundering and terrorist financing through the imminent enforcement of Travel Rule guidelines for crypto-asset service providers (CASPs). Announced by the European Banking Authority (EBA), these guidelines will become mandatory for all crypto exchanges operating within the EU by December 30, 2024.
Crypto AML/CFT Rules for CASPs
The new EU guidelines represent a significant step in integrating crypto activities into the EU’s existing Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) framework. Regulation (EU) 2023/1113, also known as the Travel Rule Guidelines, requires CASPs, as defined by the Markets in Crypto Assets (MiCA) regulation, to collect and report information on transfers of funds and digital assets.
Under these guidelines, CASPs must:
- Gather user data for transactions.
- Identify service-related purchases.
- Detect potentially suspicious transfers.
- Establish clear policies for handling multi-intermediated transactions and cross-border transfers.
The EBA acknowledges that achieving compliance may financially strain crypto exchanges and service providers. However, it expects the long-term benefits to outweigh the initial costs, stating, “These Guidelines are expected to contribute to making the fight against ML/TF more effective.”
Continuation of Existing AML/CFT Compliance
Crypto exchanges already subject to the EU’s existing Anti-Money Laundering Directive (AMLD) or similar domestic AML/CFT regimes will continue to operate under those regulations. The Travel Rule Guidelines add a layer of compliance specifically targeting digital assets transactions.
Cardano Meets MiCA Standards
As European governments tighten regulations, the crypto industry is taking proactive steps towards compliance. The Cardano Foundation, in collaboration with the Crypto Carbon Ratings Institute (CCRI), recently released sustainability indicators for the Cardano network that align with the upcoming MiCA regulation.
Cardano’s report highlights:
Its energy-efficient consensus mechanism, which significantly reduces electricity consumption compared to proof-of-work protocols.
The network’s total annualized energy consumption.
Its carbon footprint and marginal power demand per transaction.
This proactive stance from the crypto industry shows a willingness to collaborate with regulators and operate within a transparent and accountable framework. The December deadline for Travel Rule compliance will be a pivotal moment for the EU and the global crypto landscape, ushering in a new era of AML/CFT compliance for virtual assets transactions.
The EU’s enforcement of the Travel Rule guidelines marks a critical development in the regulation of crypto-asset service providers. While compliance may pose financial challenges for crypto exchanges and service providers, the EBA emphasizes the long-term benefits of a more effective fight against money laundering and terrorist financing. The crypto industry’s proactive measures, as demonstrated by Cardano’s alignment with MiCA standards, reflect a growing commitment to regulatory collaboration and transparency. As the December deadline approaches, the crypto sector is poised for a significant transformation towards enhanced AML/CFT compliance.
Source: coinspeaker.com
The post EU Extends Crypto Travel Rules, Mandates Compliance in 6 Months appeared first on HIPTHER Alerts.
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