Last week, the European Central Bank (ECB) published a press release addressing "crypto-asset activities and services" in the European Union. According to the press release, "the finalisation of several regulatory initiatives at European and international level[s] ... will lay down the broader regulatory framework under which crypto activities are allowed, and how banks should manage the risks they pose." Among other things, the press release notes that in evaluating bank activities involving cryptocurrencies, the ECB will focus on risks related to cybersecurity, the use of third-party providers, and anti-money-laundering efforts/combating the financing of terrorism. According to the press release, the ECB is assessing "banks' digital transformation, including the role of crypto technologies, that will result in horizontal analysis by the end of 2022."

The South African Reserve Bank recently published guidance "to inform banks and controlling companies of practices related to the effective implementation of adequate anti-money-laundering and counter-financing of terrorism (AML/CFT) controls in relation to crypto assets (CAs) and crypto asset service providers (CASPs)." The guidance seeks to further implement recommendations from the Financial Action Task Force. Among other things, the guidance defines "crypto asset" and "crypto asset service provider," addresses a risk-based approach to identifying and assessing CA and CASP risks, and underscores the importance for banks to monitor client transactional activity.

Last week, the South Korean Financial Intelligence Unit (KoFIU) published a press release warning that 16 virtual asset service providers (VASPs) are targeting South Korean consumers without proper registration. According to the press release, the KoFIU has informed the relevant financial regulators in their respective countries about the violations and has taken steps to block South Korean consumer access to the unregistered VASPs, including steps to block transfers of virtual assets to and from the unregistered entities.

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