New EU regulations mandate crypto exchanges to comply with Travel Rule guidelines, enhancing AML/CFT measures starting Dec. 30.
In a significant move to bolster Anti-Money Laundering (AML) measures, the European Banking Authority (EBA) announced the extension of Travel Rules guidelines to crypto service providers and their intermediaries.
Crypto exchanges operating in the European Union will be subject to Regulation (EU) 2023/1113 (Travel Rule guidelines) from Dec. 30, which mandates reporting information on transfers of funds and crypto assets.
As a result, crypto asset service providers (CASPs), as defined in the EU’s Markets in Crypto-Assets Regulation (MiCA), will be subject to the EU’s Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) regime.
Impact of EU travel rules on crypto exchanges
Once the regulation sets in, payment service providers (PSPs), intermediary PSPs, CASPs and intermediary CASPs will be given a two-month buffer period to declare adherence to the new requirements.
“The deadline for competent authorities to report whether they comply with the Guidelines will be two months after the publication of the translations.”
Some general provisions include collecting users’ information for the transfer of funds or crypto assets, identifying whether the transaction is related to the purchase of services and detecting transfers that appear to be linked.
Additionally, crypto service providers and intermediaries will need to declare their policies on multi-intermediation and cross-border transfers.
Aiming for long-term benefit
The EBA acknowledged that attaining compliance with EU Travel Rule guidance will put crypto exchanges and service providers under financial stress. However, the regulatory agency anticipates overall benefit in the long run.
“Overall, the benefits from these Guidelines are expected to outweigh potential 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 a domestic AML/CFT regime “will continue to be subject to the applicable AML/CFT requirements.”
While European governments strengthen their grip on crypto exchange activities, crypto protocols are taking a proactive approach toward compliance.
The Cardano Foundation, in partnership with the Crypto Carbon Ratings Institute, released sustainability indicators for the Cardano network that will comply with the MiCA regulations in the EU.
The report stresses that Cardano runs on a more energy-efficient consensus protocol and consumes significantly less electricity than proof-of-work protocols.
It also provides the total annualized electricity consumption and carbon footprint of the Cardano network, along with the marginal power demand per transaction per second, among other important metrics.
Source:- COINTELEGRAPH
