EBA ¦ AML/CFT Newsletter - Issue 14

EBA AML/CFT Newsletter Issue 14 – Key Updates on Financial Crime Regulation in 2024

Introduction to the EBA’s 2024 Achievements in AML/CFT

The European Banking Authority (EBA) has released its 14th AML/CFT newsletter, summarizing significant developments and regulatory updates in the fight against money laundering and terrorist financing throughout 2024. The newsletter highlights final guidelines, new regulations affecting crypto-asset service providers, supervisory improvements, and the evolving EU regulatory framework. These updates reflect the ongoing commitment to strengthen financial crime prevention across the EU.

MiCAR Guidelines and the Impact on Crypto-Assets

A major milestone in 2024 was the publication of the final EBA Guidelines on redemption plans under the Markets in Crypto-Assets Regulation (MiCAR). These guidelines require issuers of asset-referenced tokens (ARTs) and e-money tokens (EMTs) to develop detailed redemption plans covering liquidation strategies, mapping critical activities, and customer due diligence (CDD) on token holders submitting redemption claims. Importantly, if issuers are not subject to AML/CFT obligations themselves, intermediaries who are obliged entities under the Anti-Money Laundering Directive (AMLD) must perform these checks. With MiCAR fully applicable from December 30, 2024, this represents a significant step towards regulatory clarity and consumer protection in the crypto sector.

Strengthening AML/CFT Supervision and Governance

The EBA published two key sets of final guidelines to standardize governance arrangements and internal controls for financial institutions to ensure compliance with Union and national sanctions. These guidelines apply broadly to credit institutions, e-money institutions, payment service providers (PSPs), and crypto-asset service providers (CASPs), emphasizing risk management systems that prevent breaches or evasion of restrictive measures. The focus on governance reflects an increasing priority on operational risk management linked to financial crime.

Advancements in EU AML/CFT Framework and Industry Engagement

With the new EU AML/CFT framework entering into force, featuring a harmonized rulebook and a new European AML/CFT Authority (AMLA), the EBA has actively engaged industry stakeholders. A roundtable held in October 2024 gathered insights from over 150 representatives across 67 trade associations to inform the EBA’s advice to the European Commission. This inclusive approach aims to enhance the effectiveness of AMLA and streamline AML/CFT supervision across member states.

Bastian Schwind-Wagner_Follow "The EBA’s 2024 AML/CFT updates highlight critical regulatory advancements, especially concerning crypto-assets, reflecting increased efforts to integrate emerging financial services into a robust anti-financial crime framework across Europe."

Expanding AML/CFT Obligations to Crypto-Asset Service Providers

The newsletter underscores a pivotal change as CASPs become “obliged entities” under AML/CFT regulations starting December 2024, with all relevant EBA AML/CFT technical standards now applying to them. The transitional “grandfathering” clause allows CASPs operating before this date to continue services until mid-2026 while applying for authorization under MiCAR. This legal shift marks the formal inclusion of crypto businesses into the regulated financial crime framework.

Monitoring and Reporting Financial Crime Risks

The 2024 risk assessment report by the EBA highlights that European banks continue to regard money laundering and terrorist financing risks as significant operational threats. The report also notes rising concerns over fraud-related laundering risks and operational challenges associated with sanctions linked to geopolitical conflicts. The EuReCA database has seen increased reporting of material weaknesses mainly related to customer due diligence and transaction monitoring, reflecting ongoing supervisory challenges.

Forthcoming Reports and Consultations

Looking ahead, the EBA plans to publish reports on lessons learned from supervising CASPs in relation to ML/TF risks and recent developments in crypto-assets, including decentralized finance (DeFi). Additionally, a consultation is open on criteria for appointing central contact points for CASPs to ensure local AML/CFT compliance. These initiatives demonstrate a continuing effort to refine frameworks addressing emerging financial crime risks.

Conclusion

The EBA’s 2024 activities indicate a clear trajectory toward stronger, more harmonized AML/CFT supervision within both traditional finance and the rapidly evolving crypto-asset sector. By setting clear guidelines, fostering industry dialogue, and enhancing supervisory tools, the EBA supports the EU’s broader goal of combating financial crime effectively while enabling innovation.