Combatting Fragmentation and Stimulating Harmonisation Through EU Supervision of Crypto-Asset Services
Crypto-asset activities have expanded rapidly across the European Union (EU). This growth has increased the risk of money laundering and terrorist financing (ML/TF), especially in situations where regulatory oversight was fragmented or incomplete. The European Banking Authority (EBA) published a report in the fall of this year which explains how certain crypto-asset businesses created vulnerabilities and how the Markets in Crypto-Assets Regulation (MiCA) and AML frameworks (AMLR and AMLD6) aim to improve supervision. This article provides a brief insight in the key takeaways from this report.
Supervisors observed that some crypto businesses operated without approval, moved between EU countries to avoid oversight, or misused legal exemptions. Many had weak systems for checking customers, detecting suspicious transactions, or following sanctions. Some firms used complicated ownership structures or partner companies to stay active despite earlier supervisory issues. These behaviours limited authorities’ ability to manage risks and created openings for money laundering and terrorist financing.
MiCA and the new EU anti-money-laundering regulations introduce stronger safeguards to address these problems. All crypto-asses service providers (CASPs) must now apply for one EU authorisation based on harmonised rules, which removes differences between Member States and prevents firms from seeking out weaker jurisdictions. Providers must show clear ownership, sound internal governance, and reliable customer- and transaction-monitoring systems before they can operate. The AML Regulation and AMLD6 further strengthen cooperation between national supervisors, improve transparency on who controls a company, and require more consistent risk assessments. The future EU Anti-Money Laundering Authority (AMLA) will also oversee high-risk firms directly, creating an additional layer of control.
These changes help create a safer and more predictable environment for crypto activities in the EU. The main lesson from recent cases is that strong, coordinated supervision and consistent rules across all Member States are necessary to limit financial crime risks. Clear standards, early information-sharing, and firm enforcement give supervisors the tools to identify problems quickly and ensure that only responsible businesses can enter or remain in the European market. The EBA formulates nine points of focus that should be established to treat authorisation as a true gatekeeping process, to close loopholes and build strong cooperation mechanisms across the EU.
Although the role of the EBA will partially transfer to AMLA by the end of 2025, the EBA will continue contributing under its MiCA mandate to maintain supervisory convergence and early risk detection.
Conclusion
At Compliance Champs, we follow these developments with a critical lens. We support organizations in aligning their processes and controls with MiCAR, the Wwft, and international standards. Through knowledge sharing, training, and tailored advice, we help professionals identify risks in time, implement mitigating measures, and embed sustainable compliance. Only through joint efforts by operators, supervisors, financial institutions, and technology partners can the balance between innovation and integrity truly be restored.
Do you seek support and assistance in enhancing your Crypto Compliance Framework?
Please reach out to us on: info@compliancechamps.com
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