FIAU Issues Key Notice to CASPs and PSPs on Updated EU Funds Transfer Regulations

On December 30, 2024, The Financial Intelligence Unit (FIAU) announced that it is going to adopt the revised guidelines issued by the European Banking Authority (EBA).

The unit specifically addressed crypto-asset service providers (CASPs) & payment service providers (PSPs) about regulation (EU) 2023/1113, also known as The Transfer of Funds (recast) Regulation.

Under regulation 17 of the “Prevention of Money Laundering & Funding of Terrorism Regulations(PMLFTR)”,  the FIAU also adopted these guidelines as its own legally binding guidance.

Additionally, these new guidelines will replace & repeal the FIAU “Guidance Note on Transfers of Funds having missing or incomplete information”.

What is The Transfer of Funds Regulation?

The Transfer of Funds (Recast) Regulation (TFR recast)1 was published in the Official Journal of the European Union on June 9, 2023.

The TFR recast extends the duty to give information about the source and beneficiary to crypto asset transfers, bringing the EU’s AML/CFT framework in line with the FATF’s modified Recommendation 15 which is mostly considered the “Travel Rule”.

The TFR recast takes effect on December 30, 2024, with the removal of the Transfer of Funds Regulation 2.

On July 4, 2024, the European Banking Authority (EBA) released equivalent Guidelines, which will take effect on December 30, 2024.

The Guidelines are intended to give specific guidance on “how payment service providers (PSPs), intermediate PSPs (IPSPs), crypto-asset service providers (CASPs), and intermediary CASPs (ICASPs) must comply with certain sections of the TFR recast.

The Guidelines include information on:

•  Information that must accompany a transfer of funds or crypto-assets.
• The actions that “PSPs, IPSPs, CASPs, and ICASPs” should take to identify missing or incomplete information, as well as the appropriate action to take if the needed information is absent or incomplete.
• The method by which the information will be communicated, as well as the features of the systems employed to do so.
• Technical aspects of using the TFR recast for direct debits.
• The measures include criteria and methods for identifying and verifying the identity of the source or recipient of a transfer to or from a self-hosted address.

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In all cases, the Guidelines will apply anytime a service provider transfers crypto-assets as described in the TFR recast.

It should be emphasized that if a PSP, IPSP, CASP, or ICASP discovers another PSP, IPSP, CASP, or ICASP that frequently fails to submit the relevant information, a notification must be issued to the FIAU without undue delay and no later than three months following the discovery.

As written in the FIAU Notice CASPs & PSPs that are involved in the transferring of funds must comply with these guidelines, including EU Regulation 2023/1113 of the European Parliament.