The European Banking Authority (EBA) has commenced a pivotal consultation process concerning the implementation of the travel rule for cryptocurrency transactions. This initiative aims to gather insights and opinions on the expected procedures for crypto asset service providers to comply with the travel rule, as well as address challenges in obtaining necessary information.
The proposed guidelines have a primary focus on preventing the misuse of funds and certain crypto-assets transfers for purposes of money laundering and terrorist financing. They complement a prior consultation held in June, which addressed due diligence procedures for anti-money laundering processes.
In its recent opinion on money laundering and terrorism financing risks, the EBA highlighted the perception of significant risks associated with CASPs by most competent European authorities. These risks are attributed to factors such as transaction pseudo-anonymity, interaction with the dark web, the use of crypto-assets in cybercrime and fraud schemes, increased money laundering, and evasion of sanctions.
𝐊𝐞𝐲 𝐃𝐞𝐭𝐚𝐢𝐥𝐬 𝐨𝐟 𝐭𝐡𝐞 𝐆𝐮𝐢𝐝𝐞𝐥𝐢𝐧𝐞𝐬:
🔹 Exclusion of the travel rule's application for transactions between unhosted wallets, as they do not involve CASP intermediation. However, incoming transactions from unhosted wallets to CASP-hosted wallets exceeding 1,000 euros must adhere to the travel rule.
🔹 Description of procedures for CASPs to verify control over both addresses in a transaction, employing advanced analytical tools, user media capture, predefined transactions, message signing, and customer authentication.
🔹 Requirement for CASPs to utilize at least two procedures to collect the necessary data, with provisions for additional measures if initial processes are insufficient.