By CARLO BOFFA, EU Correspondent
The Bank of Italy said payment service providers and crypto-asset providers must always check that neither party to a transfer appears on an EU or national sanctions list.
The instruction was contained in a public communication dated September 7, in which the regulator clarified that the checks apply in every case falling outside a narrow set of exemptions.
“It is clarified that, outside the cases mentioned above, PSPs and CASPs are always required to verify the originator’s and beneficiary’s data for transfers of funds or crypto-assets,” the regulator said.
The exemptions cover instant payments, for which EU law bars PSPs from screening both parties per transfer but requires them to vet their own customers at least once a day instead.
The Bank of Italy also lets PSPs assessed as low-risk apply the same lighter treatment to domestic, Italy-to-Italy fund transfers.
The regulator urged firms to check that their screening systems, including tools built or supplied by third parties, meet the same standard.
“In particular, attention is drawn to the need to verify that the systems in use – including solutions developed or supplied by third parties – do not incorporate minimum amount thresholds that would limit the transfers subject to verification,” the regulator said.
The release comes after crypto exchange Kraken faced a compliance-targeted dust attack involving nearly 12,000 micro-transfers from sanctioned exchange HTX. Kraken temporarily locked certain customer accounts while its compliance systems reviewed the incoming funds.
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