Circle's response to the EBA consultation on revised guidelines on money laundering and terrorist financing risk factors

In a response to the European Banking Authority's (EBA) proposed amendments to extend money laundering and terrorist financing (ML/TF) guidelines to Crypto-Asset Service Providers (CASPs), Circle Internet Financial emphasizes the need for these guidelines to align with established European Union legislation, specifically the Markets in Crypto-Assets Regulation (MiCA) and the Transfer of Funds Regulation (TFR). Circle argues for the precision in the terminology used to define service providers, suggesting the MiCA-defined term "crypto-asset service provider" to avoid unnecessary inclusion of technology and ancillary service providers that pose limited ML/TF risks. Additionally, Circle contends that self-hosted wallets should not be inherently considered high-risk, noting their importance in the blockchain ecosystem for financial inclusion and arguing for a risk-based approach already addressed by TFR. The organization also suggests that entities exempt from MiCA should not be automatically subjected to these guidelines, as their exclusion from EU regulations indicates a lack of need for additional financial and AML oversight.