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Risk Advisory
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Blockchain & Crypto LAB
After the boom of the last few years, the digital asset ecosystem has managed to position itself as one of the sectors of reference and with an exponential growth forecast. At Grant Thornton, we help our clients to explore all aspects of this technology, to create tailored solutions that bring value to the business and address problems and inefficiencies in the business sector.
This amendment intends to help cryptoassets service providers (CASPs) to detect and mitigate money laundering (ML) and terrorist financing (TF) risk factors.
These modifications are produced by the historical use of CASPs for money laundering, given the intrinsic characteristics of cryptoassets, such as anonymity or the high transfer speed. In this line, a series of measures have been incorporated, to instruct CASPs, credit institutions and other types of entities, of the aspects they must analyze and monitor to mitigate ML and TF risks, among which the following stand out:
- New risk factors that impact specifically on cryptoassets and CASPs: product typology, distribution channels or geographical aspects.
- Indicate the potential ML and TF risks to which financial and credit institutions are exposed in the event of having commercial relations with unauthorized or unregulated CASPs under European legislation.
- Operating factors that CASPs must carefully analyze in the evaluation of their commercial activities with clients or service providers. These factors include:
- Transactions to or from self-hosted addresses, decentralized platforms or transfers to other service providers that do not comply with EU ML and FT regulations, that is, that are not authorized or regulated in this area.
- Products that favor the anonymity of transactions, making it difficult to trace funds, such as the use of mixers or tumblers.
- The nature of the clients and their behavior, having to perform an analysis of the transfers they make to detect inconsistent or incorrect information, or unexpected transaction patterns. For example, use of Crypto-ATMs from different locations to transfer to the same account, use of unregulated P2P platforms under MiCA or the use of protocols that connect two blockchains such as Monero or Zcash.
- The relationship of the clients or beneficiaries with high-risk jurisdictions in terms of BC and FT.
To mitigate these risks, CASPs should use analytical tools to evaluate funds in cases with higher risk of incurring ML and TF risks, as well as to ensure the application of relevant national legislation for those cases with lower risk.
Due to the interconnectedness that these providers have with the financial sector, the Guidelines extend to financial and credit institutions that interact with CASPs or have exposure to cryptoassets.
These amendments represent an important step in the fight against money laundering in the EU and aim to homogeneously guide companies that provide cryptoassets in the process of identifying and evaluating these risks.
Once the guidelines translated into each EU official language are published on the EBA website, competent authorities will have two months to report whether they are in conformity with the regulations, with the requirements being mandatory from 30 December 2024.
