The European Banking Authority (EBA) has updated its Travel Rule guidelines to include crypto service providers and intermediaries, according to a July 4 statement.
From December 30, 2024, crypto exchanges in the European Union must follow the Travel Rule guidelines (EU-2023/1113). The rule requires exchanges to report information about funds and transfers of crypto assets. It specifies the information required for transfers and how missing data can be identified and addressed.
This update is part of the EU’s efforts to combat money laundering and terrorist financing. The EBA aims to ensure the traceability of asset transfers for investigation. Once Payment Service Providers (PSPs), Intermediate PSPs, Crypto-Asset Service Providers (CASPs) and Intermediate CASPs are implemented, they will have two months to comply.
EBA stated:
“The deadline for competent authorities to report whether they comply with the guidelines is two months after the publication of the translations in the official EU languages.”
The guidelines also require collecting user information to determine whether transactions are service-related or related to other transfers. Crypto service providers must also disclose their policies on cross-border transfers.
The EBA states that the directive offers long-term benefits. It supports EU Regulation on Crypto Asset Markets (MiCA) and aims to create uniform regional regulations. Overall, it is expected to reduce money laundering and terrorist financing in the EU. The regulator added:
“The main objective is to make the misuse of funds and certain transfers of crypto assets for terrorist financing and other financial criminal purposes more difficult, and to enable the relevant authorities to fully trace such transfers where this is necessary to prevent money laundering prevent, detect or investigate money and terrorism financing (ML/TF).”
The update to the Travel Rule guidance comes as the second phase of the MiCA regulation approaches. While the first phase, focused on stablecoins, is already in effect. The second phase, aimed at crypto asset service providers, will begin by the end of the year.