The European Banking Authority (EBA) has published new guidelines that will affect both payment service providers (PSPs) and crypto-asset service providers (CASPs).
According to the EBA press release of November 14, 2024, the guidelines “contain provisions necessary to ensure that the governance and risk management systems of financial institutions are robust and sufficient to address the risk that they may breach or escape restrictive measures.
Importantly, this will ensure that financial institutions comply with European Union (EU) restrictive measures regimes when transferring funds or crypto-assets.
The new rules will come into force on December 30, 2025.
The guidelines will ensure compliance with restrictive measures imposed by the EU and individual Member States
The EU is seeking to strengthen its regulatory framework for combating money laundering (AML) and countering the financing of terrorism (CFT).
The new guidelines will pay particular attention to ensuring that PSPs and PSAPs have robust internal policies and procedures. Furthermore, this requires controls in place to comply with restrictive measures imposed both by the EU and by individual Member States.
The guidelines aim in particular to harmonize practices across the EU. Will this ensure that financial institutions operate within their jurisdiction and follow a common set of rules? We’ll have to wait and watch.
According to the EBA, weaknesses in internal governance and risk management frameworks could expose financial institutions to legal and reputational risks. In the future, this could potentially undermine the effectiveness of the EU’s restrictive measures regimes.
Related: Non-EU crypto firms subject to compliance check with MiCA, warns ESMA
What are the new requirements for PSPs and CASPs?
Under these new guidelines, PSPs and PSAPs that transfer funds or crypto-assets must adopt reliable screening systems. This will ensure compliance with EU sanctions.
In addition, systems must be able to filter datasets against restrictive measures adopted by the EU under Article 29 of the Treaty on European Union (TEU) or Article 215 of the Treaty on European Union (TEU). the functioning of the European Union (TFEU).
It is important to note that financial institutions will need to manage the risks associated with possible violations or circumvention of restrictive measures. This includes developing procedures for handling alerts generated by their control systems.
Finally, tThe guidelines emphasize the need for a strong governance structure where responsibility for compliance with restrictive measures is clearly distributed within an organization.
Related: EU watchdog warns crypto firms of offshore risks under MiCA
The Markets in Crypto-Assets Regulation (MiCA), which will apply fully from December 2024, provides a comprehensive framework for regulating crypto-assets across the EU. And, The new EBA guidelines complement MiCA by clarifying what PSAPs must do to comply with restrictive measures when transferring crypto-assets.
MiCA regulation: France adapts to a unified European framework for crypto
1/ The European MiCA regulation comes into force in December 2024, transforming the existing French rules on crypto-assets!
2/
– Wyden (@wyden_io) November 14, 2024
MiCA regulation: France adapts to a unified European framework for crypto 
The AMF has already started accepting preliminary requests from CASP to ensure a smooth transition.… The European Banking Authority publishes news guidelines for crypto providers. What does this mean for PSAPs and PSPs? appeared first on .
