Italy Cracks Down on Crypto Sanctions Evasion
The Bank of Italy has tightened its regulations on cryptocurrency service providers to prevent sanctions evasion linked to Russia and Iran. According to a recent supervisory guidance, crypto asset service providers (CASP) must adopt internal controls to filter out past transfers linked to sanctioned entities.
The step does not create new sanctions but requires compliance with existing EU rules and European Banking Authority (EBA) guidelines. The EBA guidance calls on crypto businesses to establish control systems that can block fund transfers by sanctioned persons through know-your-customer checks, transaction screening, and due diligence.
Authorities are focusing on cryptocurrencies amid concerns about sanctions evasion involving Russia and Iran. Blockchain security firm CertiK reported that the ruble-pegged stablecoin A7A5 has exceeded $110 billion in cumulative on-chain transaction volume since its launch. The issuance, collateral, and trading infrastructure related to A7A5 includes entities sanctioned by the United States, Britain, and the EU.
Cross-border payments using cryptocurrencies are also expanding in Iran. The Financial Times reported that Iran's central bank partially eased foreign-exchange rules so companies can use Tether and Bitcoin among others. US authorities said they sanctioned cryptocurrency wallets identified as linked to Iran's central bank last July, freezing more than $130 million.