- Cardano Foundation adjusts operations to meet MiCA regulations, enhancing compliance with upcoming financial standards.
- Collaboration with Crypto Carbon Ratings Institute introduces new sustainability metrics for the Cardano network.
Starting December 30, cryptocurrency exchanges operating within the European Union are required to comply with the Travel Rule guidelines as outlined in Regulation (EU) 2023/1113.
The #EBA has just published new guidelines on the information that should accompany transfers of funds and certain crypto assets.
🔗https://t.co/uNykQqOHwb pic.twitter.com/EwA6ZtYm8c
— EU Banking Authority – EBA 🇪🇺 (@EBA_News) July 4, 2024
This regulation, issued by the European Banking Authority (EBA), extends anti-money laundering (AML) and counter-terrorism financing (CTF) measures to include all providers of crypto asset services (CASPs) and their intermediaries, as stipulated by the EU’s Markets in Crypto-Assets Regulation (MiCA).
This means that cryptocurrency platforms will need to implement stricter procedures to monitor and report transactions to help prevent illegal activities such as money laundering and terrorism financing.
Implementation and Compliance Procedures
With the new regulation set to take effect, both payment service providers (PSPs) and intermediary PSPs, alongside CASPs and intermediary CASPs, are allocated a two-month grace period to comply.
This period allows these entities to adjust their operational protocols to align with the new requirements. The EBA has specified that competent authorities must report on their compliance within two months following the availability of the regulation’s translations.
The primary requirements of this regulation involve meticulous reporting on the transfer of funds and crypto assets. It obligates CASPs to collect detailed user information for each transaction, ascertain if transactions relate to service purchases, and identify potentially suspicious transfers.
Expectations and Long-Term Impact
Although the new regulations might initially impose financial challenges on cryptocurrency exchanges and service providers, the European Banking Authority (EBA) anticipates that the benefits derived over time will surpass these initial expenses.
The objective behind these regulations is to improve the effectiveness of current systems designed to fight against money laundering and the financing of terrorism.
Crypto exchanges currently regulated under the EU’s Anti-Money Laundering Directive (AMLD) or domestic AML/CFT regimes will continue to meet these established standards.
Proactive Industry Adaptation
In preparation for the new regulatory requirements, entities such as the Cardano Foundation are adjusting their practices to conform to MiCA regulations. Working together with the Crypto Carbon Ratings Institute, the Foundation has rolled out sustainability metrics that highlight the energy efficiency of the Cardano network.
These metrics show that Cardano uses less electricity than conventional proof-of-work protocols, underlining the network’s dedication to environmentally friendly blockchain technology.
This regulatory update marks an advancement in the EU’s efforts to monitor and regulate the burgeoning crypto market, ensuring greater transparency and security in digital financial transactions.
