Italy Implements EU Crypto Regulation to Combat Illicit Transactions

Italy has officially put into effect the European Union’s Transfer of Funds Regulation, marking a significant step in the country’s efforts to prevent money laundering in the realm of cryptocurrency. The new rules, which require Virtual Asset Service Providers (VASPs) and Crypto Asset Service Providers (CASPs) to gather, transmit, and retain detailed data about both the sender and recipient of crypto transactions, have been enacted through Legislative Decree No. 204.

A notice issued by tax and accounting publisher Wolters Kluwer highlighted the development, stating: “With Legislative Decree No. 204/2024, a new piece was added to the set of regulatory interventions.” The statement was authored by Fabio Antonacchio, a colonel in Italy’s Guardia di Finanza, the law enforcement agency specializing in financial crimes.

Writing on LinkedIn, Antonacchio described the regulation as “a decisive step towards enhancing financial security and combating illicit use of crypto-assets.” He emphasized that Italy has now fully integrated the EU’s regulatory framework into national law. However, he also cautioned that enforcement remains complex.

A major point of concern, according to Antonacchio, is the exclusion of decentralized finance (DeFi) platforms from the regulation’s scope. These platforms operate autonomously on blockchain networks and do not rely on conventional financial intermediaries, making regulatory oversight difficult. “Ensuring effective oversight would require that DeFi platforms either operate under legal entities established within the EU or maintain clear interfaces with supervisory authorities,” he noted.

The legislative move also brings Italy’s regulatory approach in line with the standards outlined by the Financial Action Task Force (FATF), the international organization responsible for setting global anti-money laundering guidelines.

By fLEXI tEAM