The European Banking Authority will extend its money laundering/terrorist financing guidelines to cover crypto-asset service providers (CASPs).
Due to come into effect from 30 December 2024, financial institutions exposed to crypto assets will have an updated set of guidelines governing how to mitigate money laundering risk.
CASPs themselves will be subjected to new advice on their own policies and controls unique to their business.
The EBA said the purpose of the new guidelines is to “harmonise the approach” that CASPs should engage in when adopting AML policies and controls.
As such, the rules outline various risk factors and possible mitigation strategies CASPs could implement.
The EBA said the “amendments aim to help CASPs identify these risks 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.
“Based on these risk factors, CASPs can develop understanding of their customer base and to identify which part of their business or activity is most vulnerable to ML/TF.
“The guidelines also explain how CASPs should adjust their mitigating measures, including the use of blockchain analytics tools.”
EU agrees to enhanced crypto rules
The guidelines follow on from the EU ongoing work on putting in place Europe-wide regulations governing the crypto-assets and currencies.
This month, the European Council and Parliament finalised an agreement on a legislative package that would impose stricter AML rules across the continent.
Among other measures, this will require CASPs follow certain information sharing and due diligence procedures, bringing crypto into line with other financial asset classes.
Each European member state’s Financial Intelligence Unit (FIU) will given beefed-up powers regarding access to financial, legal and administrative records.
FIU’s will also have the right to suspend transactions pending an investigation.
In 2022 the European Betting and Gaming Association (EGBA) issued guidance for how iGaming companies can best comply with the planned updates to the AML rules.
Gambling with crypto remains outlawed by most European member states, including Malta.
Kindred in court
This week, Swedish newspaper Expressen revealed that a famous former customer has filed a lawsuit against Unibet owner Kindred, with a view to suing the firm for SEK10.3m (€1.0m).
Self-described gambling addict Per Holknekt, who is also a Swedish fashion designer and media entrepreneur, gambled away as much as SEK26m over 15 years, and claims that he was “seduced into a viciously dependent position towards the gambling companies.”
After announcing that he would be filing a lawsuit against Kindred in 2020, this week the suit was sent to the Stockholm District Court.
“The gambling company has deliberately ignored the player’s gambling addiction and through constant incentives worsened his financial situation,” the lawsuit claims.
Kindred told Expressen it had noted the lawsuit, but declined to comment further.
Calling all crypto bros
An interview in the Financial Times shed a light on the difficulties of regulating cryptocurrency, as it revealed the chair of the European Banking Authority (EBA) holds major concerns over the regulator’s ability to govern the industry.
The EBA is set to introduce new regulations around digital currencies by 2025, although it appears that several obstacles still stand in its way.
According to the article, the Authority’s ability to hire specialised staff is a “major concern,” while chair José Manuel Campa said the organisation was also worried about the logistics of planning for its new powers, as it will not find out which currencies fall under the regulation until very soon before its introduction.
The intention is that the EBA will supervise “significant” tokens that are widely used as means of payment, as well as stablecoins, which are popular tokens linked to traditional assets.
According to the FT, banks, fintechs and consultancies are making the EBA’s life difficult by snapping up specialist talent while offering “lavish” packages to attract the top performers to work with them.
This does no favours for the regulator, which offers compensation packages in line with those of the European Commission. Campa said that giving the regulator more freedom to determine pay packets – and thus help it attract the talent it requires – is “not within the range of possible discussions.”
Meta chases its losses
Investors in Meta will be celebrating this week after the social media giant revealed it had managed to reduce the quarterly loss of its Facebook Reality Labs (FRL) division from a whopping $2.96bn in Q1 to a frankly insignificant $2.81bn in Q2.
The Crypto Times reported that FRL generated $452m in revenue during Q2, a tiny portion of Meta’s total $28.4bn in quarterly turnover.
According to the author, Meta previously estimated the FRL division would reduce its net profit by around $10bn in 2021, with the company suggesting it was ready to spend even more on the division in the coming years.
Back in 2001, Microsoft sold the Xbox at a loss so it could break into gaming and beat Sony and Nintendo. It lost around $125 on every console sold. It sold 24 million. Bill Gates also added more memory to the machine to make developers like Tim Sweeney happy.
— Dean Takahashi (@deantak) July 29, 2022
Reality Labs is Meta’s research and development division for virtual and augmented reality, and the owner of the Oculus Quest VR headset. The firm currently operates 12 Reality Labs research facilities around the world.
Meta’s latest financial report showed it had suffered its first year-on-year revenue decline in its history, after a fall in advertising sales saw total revenue slip by 1%.