New guidance note for Crypto-Asset Service Providers (CASPs)

Malta’s Sanctions Monitoring Board (SMB) has issued a new guidance note for Crypto-Asset Service Providers (CASPs) on compliance with EU restrictive measures, with a particular focus on Regulations 833/2014 and 269/2014.

 

Key takeaways for CASPs:

🔴 Screening obligations extend beyond the customer. Controls should also identify prohibited counterparties, including exchanges, platforms, and other CASPs involved in a transfer (Arts. 5ad, 5ba and 5bb).

🔴 An asset freeze and a transaction prohibition are distinct concepts. A blockchain screening alert does not automatically trigger an asset freeze.

🔴 Where funds are received from a prohibited entity, they should not be returned automatically. A return transaction may itself constitute a breach of the prohibition. Assets should be held while appropriate due diligence is carried out.

🔴 An alternative wallet address provided by a customer is not sufficient on its own. CASPs must verify that the wallet is not affiliated with the prohibited entity.

🔴 Derogations may be available, but only after determining whether the relevant prohibition applies to the specific circumstances.

 

The common thread is that every case requires its own assessment, and the responsibility for making the compliance determination ultimately rests with the CASP.

Link to the new guidance note: Guidance-note-on-compliance-with-applicable-EU-restrictive-measures-for-crypto-assets-and-crypto-as…

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