In 2023 the EU finalized the Markets in Crypto-Assets Regulation (MiCAR) which had a companion anti money laundering (AML) regulation relating to the travel rule. This involves passing details along with a transaction. Today, the European Banking Authority (EBA) published the AML guidelines that implement the regulations. They apply from 30 December 2024. Transfers by CASPs to self hosted wallets are treated as high risk.
These kinds of transactions generally trigger enhanced due diligence, which can be invasive. Instead of just asking about identity, it involves questions about sources of income and wealth. We highlighted these issues when the EBA ran a consultation last year.
On the one hand, this could be very challenging for NFT platforms as many people keep NFTs in self hosted wallets. However, the EBA also outlined steps that will reduce risk. For example, if the product allows transactions with a customer’s bank account in the EU, AML compliance would also have been conducted elsewhere.
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