EBA Proposes Central Contact Points for Crypto-Assets to Enhance Compliance

The EBA's New Consultation on AML/CFT Standards for Crypto-Assets

The European Banking Authority (EBA) has initiated a significant public consultation aimed at enhancing the anti-money laundering (AML) and counter-terrorism financing (CFT) compliance among crypto-asset service providers (CASPs) within the European Union. This consultation, which will last until February 4, 2025, serves as a platform for gathering feedback on the newly drafted Regulatory Technical Standards (RTS) designed to improve regulatory practices and compliance across the region.

Addressing Supervision Challenges for CASPs

CASPs frequently operate across multiple Member States without necessarily establishing physical branches, complicating the enforcement of AML/CFT regulations. Under the EBA's proposed RTS, specific criteria will be set to determine when a central contact point (CCP) is required, making it clear what responsibilities these points will have. This move is essential for enforcing compliance with local AML/CFT regulations, even for establishments that are not classified as “obliged entities.”

Aligning CASPs with Existing Regulatory Frameworks

To further streamline the regulatory approach, the EBA aims to extend the regulatory structure established for electronic money issuers (EMIs) and payment service providers (PSPs) to include CASPs. This means that CASPs will need to adapt to the existing frameworks, ensuring that they meet the legal requirements set out by the Commission Delegated Regulation (EU) 2018/1108.

The draft RTS also introduces additional provisions tailored to the distinct operational models that CASPs utilize, fostering an environment conducive to compliance and robust regulatory supervision.

Consultation Process and Upcoming Public Hearing

Stakeholders interested in influencing this critical regulatory process are invited to submit their comments through the EBA’s consultation page by the set deadline of February 4, 2025. Additionally, a virtual public hearing has been scheduled for January 16, 2024, from 15:00 to 17:00 CET, where participants can engage directly with EBA representatives. Interested individuals must register by January 3, 2024 to secure their spot. It is important to note that all feedback received will be published unless a confidentiality request is submitted.

Regulatory Background and Future Steps

This new initiative stems from Article 45(10) of Directive (EU) 2015/849, which specifically calls for the establishment of RTS to guide and regulate the appointment of CCPs within the crypto sector. Furthermore, Regulation (EU) 2023/1113, which comes into effect on December 30, 2024, extends vital AML/CFT requirements to CASPs, representing a significant shift in regulatory expectations that will require adaptations to the Commission Delegated Regulation (EU) 2018/1108.

The proposed RTS is envisioned to provide greater clarity and improve regulatory oversight, ensuring that CASPs operate within robust AML/CFT frameworks across all Member States. As these developments unfold, it will be crucial for CASPs to remain proactive in their compliance efforts.