Read the CySEC Circular C640

Memo #27-2024
CySEC Circular No: C640
Date: 26/04/2024

Subject: European Banking Authority’s Guidelines amending Guidelines EBA/2021/02 on customer due diligence and the factors credit and financial institutions should consider when assessing the money laundering and terrorist financing risk associated with individual business relationships and occasional transactions under Articles 17 and 18(4) of Directive (EU) 2015/849 - Guidance to crypto-asset service providers to effectively manage their exposure to ML/TF risks
Purpose: To inform Regulated Entities that EBA extended its Guidelines on ML/TF risk factors to crypto-asset service providers.

In Summary:

CySEC has issued the Circular C640 on 26/04/2024 to inform the Crypto Asset Service Providers (‘CASPs’), Cyprus Investment Firms (‘CIFs’), Administrative Service Providers (‘ASPs’), UCITS Management Companies (‘UCITS MC’), Self-Managed UCITS (‘SM UCITS’), Alternative Investment Fund Managers (‘AIFMs’), Self-Managed Alternative Investment Funds (‘SM AIFs’), Self-Managed Alternative Investment Funds with Limited Number of Persons (‘SM AIFLNP’), Companies with sole purpose the management of AIFLNPs and the Small Alternative Investment Fund Managers (‘Small AIFMs’), that  the European Banking Authority (‘EBA’) extended its Guidelines on money laundering (ML) and terrorist financing (TF) risk factors to crypto-asset service providers (CASPs).

In general, these Guidelines (EBA/GL/2024/01) foster a common understanding of ML/TF risks associated with CASPs and the steps CASPs and other credit and financial institutions should take to manage these risks.

The amended Guidelines will apply from 30/12/2024.

The new Guidelines highlight ML/TF risk factors and mitigating measures that CASPs need to consider, representing an important step forward in the EU’s fight against financial crime.
CySEC notes that the amendments aim to help CASPs identify risks of be abused for financial crime purposes, including ML and TF, by providing a non-exhaustive list of different factors, which may indicate the CASP’s exposure to higher or lower levels of the ML/TF risk due to its customers, products, delivery channels and geographical locations.

CySEC further notes that the new Guidelines also include guidance addressed to other credit and financial institutions that have CASPs as their customers or which are exposed to crypto assets.

In accordance with Circular C640, CySEC calls upon the Regulated Entities to comply with the Guidelines and be able to demonstrate that their AML/CFT policies, controls and procedures are appropriate in view of the ML/TF risks that have been identified and take the necessary mitigating measures.

The EBA new Guidelines (EBA/GL/2024/01) can be found on the following link: 

Read the CySEC Circular C640

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