NCFAs innovation and funding ecosystem

European Banking Authority Adressing Crowdfunding and Money Laundering, Terrorist Financing Risk

Crowdfund Insider |

Euopean Bank Authority - European Banking Authority Adressing Crowdfunding and Money Laundering, Terrorist Financing Risk

The European Banking Authority has published a document that addresses anti-money laundering (AML) and counter-terrorist financing (CFT) when it comes to crowdfunding. The guidelines for crowdfunding platforms are incorporated into the Final Report “on customer due diligence and the factors credit and financial institutions should consider when assessing the money laundering and terrorist financing risk associated with individual business relationships and occasional transactions.” The report was part of a consultation regarding KYC requirements.

The first section of the report is described as generic and applying to all firms. The second section, Title II, is sector-specific and designed to “complement” the first section. Specifically:

“[Title II] sets out risk factors that are of particular importance in certain of those sectors and provides guidance on the risk-sensitive application of Customer Due Diligence measures by firms in those sectors. So as to foster greater convergence of supervisory expectations of the measures firms should take to tackle emerging risks, additional sectoral guidelines have been added to the original Risk Factors Guidelines on crowdfunding platforms, providers of currency exchange services, corporate finance, and payment initiation services providers (PISPs) and account information service providers (AISPs). Therefore, in total Title II now contains thirteen sectoral guidelines about very different key financial sectors such as for instance correspondents banking, retail banking, electronic money, money remittance, life insurance and investments firms.” [emphasis added]

The EBA posits that crowdfunding service providers (CSPs) should recognize the risk of the borderless nature of their transactions as customers may be located anywhere in the world, including high-risk locations. The EBA states that CSPs should know their customers as to not be utilized for illicit activities as funds could be used to finance a terrorist attack.

See:  European Union Approves New Crowdfunding Rules that Apply to Member States, Funding Cap Set at €5 Million

The advent of pan-European crowdfunding rules, where an issuer may raise up to €5 million across all EU member states, may have compelled the EBA to address online capital formation in regards to securities crowdfunding.

Continue to the full article --> here

Download the 225 page PDF report --> here


NCFA Jan 2018 resize - European Banking Authority Adressing Crowdfunding and Money Laundering, Terrorist Financing Risk The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

Latest news - European Banking Authority Adressing Crowdfunding and Money Laundering, Terrorist Financing RiskFF Logo 400 v3 - European Banking Authority Adressing Crowdfunding and Money Laundering, Terrorist Financing Riskcommunity social impact - European Banking Authority Adressing Crowdfunding and Money Laundering, Terrorist Financing Risk

Support NCFA by Following us on Twitter!






NCFA Sign up for our newsletter - European Banking Authority Adressing Crowdfunding and Money Laundering, Terrorist Financing Risk



For more information about FFCON21: BREAKING BARRIERS, on-demand videos and ways to participate




 

Leave a Reply

Your email address will not be published. Required fields are marked *