The European Banking Authority has extended its guidelines to address money laundering (ML) and terrorist financing (TF) risks within the crypto-asset service provider (Casp) sector, the European market regulator on Tuesday 17 January.

These are aimed to tackle the growing concern that Casps can be exploited for illicit financial activities, including ML and TF. Factors such as the speed of crypto-asset transfers and identity-concealing product features increase the risk of abuse. Casps are encouraged to be aware of these risks and implement effective mitigation strategies, emphasised the EBA.

These guidelines will offer Casps insights into ML/TF risk factors, including customer profiles, product offerings, delivery channels and geographic locations. These factors are expected to help Casps gauge their exposure to varying levels of ML/TF risk and identify vulnerable areas within their operations. The guidelines also recommend using blockchain analytics tools to enhance risk mitigation and ensure compliance with anti-money laundering and counter-terrorist financing regulations.

The EBA said that these guidelines are also extended to credit and financial institutions that have Casps as clients or are exposed to crypto-assets.