Italy’s central bank orders sanctions screening for crypto transfers
Banca d’Italia ordered crypto service providers to implement internal controls to screen for crypto transfers tied to sanctioned entities.
Italy’s Banca d’Italia, the country’s central bank, has mandated crypto service providers to implement stringent sanctions screening for cryptocurrency transfers, as reported in a Monday announcement. This new requirement aims to curb illicit financial flows involving sanctioned entities across the European Union. The bank emphasized that crypto asset service providers (CASPs) must establish policies and internal controls to enforce EU financial sanctions when processing crypto transfers, ensuring adequate identification of customers and transactions linked to sanctioned entities.
The central bank's directive comes as cryptocurrencies, such as the Russian ruble-backed A7A5 stablecoin and Iran's Tether's USDt and Bitcoin (BTC), are frequently utilized by entities in Iran and Russia to evade financial sanctions. For instance, A7A5 processed a cumulative $110 billion in transactions between February 2025 and May 2026.
Iran’s central bank has also reportedly relaxed foreign currency controls to promote the use of cryptocurrencies for cross-border transactions, enabling businesses to circumvent sanctions via Iranian exchanges. US Treasury Secretary Scott Bessent announced on July 14 that American authorities had frozen over $130 million in crypto assets linked to Iran's central bank, held in various wallets.
Additionally, TRM Labs reported in June that over $3.8 billion in transactions occurred between the crypto exchange CoinEx and sanctioned Iranian entities over a period of seven years.
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