Crypto Exchanges Face EU Travel Rule Deadline in 6 Months
Starting December 30, new EU legislation requires cryptocurrency exchanges to adhere to Travel Rule requirements, strengthening AML/CFT protocols.
The European Banking Authority (EBA) announced the expansion of Travel Rules rules to include cryptocurrency service providers and their intermediaries, a significant step in strengthening Anti-Money Laundering (AML) procedures.
Regulation (EU) 2023/1113 (Travel Rule guidelines) will take effect on December 30 for cryptocurrency exchanges in the European Union. This regulation requires the exchanges to publish information on fund and cryptocurrency asset transfers.
Consequently, the Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) framework will apply to crypto asset service providers (CASPs), as defined under the European Union’s Markets in Crypto-Assets Regulation (MiCA).
Payment service providers (PSPs), intermediary PSPs, CASPs, and intermediary CASPs will have two months to declare compliance with the new regulations after the rule takes effect.
“The deadline for competent authorities to report whether they comply with the Guidelines will be two months after the publication of the translations.”
The general provisions include:
Furthermore, it will be necessary for crypto service providers and intermediaries to disclose their policies on cross-border transfers and multi-intermediation.
The European Bank for Acceptance (EBA) has admitted that cryptocurrency exchanges and service providers may face financial strain in complying with Travel Rule advice. On the other hand, the regulatory body expects long-term overall benefits.
“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.”
The applicable AML/CFT regulations “will continue to apply” to cryptocurrency exchanges and service providers currently covered by the EU’s Anti-Money Laundering Directive (AMLD) or a domestic AML/CFT regime.
Crypto protocols are being proactive in their approach to compliance, even as European governments tighten their control over cryptocurrency exchange activity.
Sustainability metrics for the Cardano network that will abide by MiCA laws were produced by the Cardano Foundation in collaboration with the Crypto Carbon Ratings Institute.
Compared to proof-of-work protocols, the paper emphasizes that Cardano uses substantially less electricity and operates on a more energy-efficient consensus system.
Among other crucial indicators, it offers the Cardano network’s total annualized electricity consumption, carbon footprint, and marginal power demand per transaction per second.
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