Italy’s central bank, Banca d’Italia, has reminded crypto-asset service providers (CASPs) that every cryptocurrency transfer must undergo sanctions screening, regardless of the transaction amount.
The regulator’s latest notice makes it clear that crypto companies cannot set internal minimum thresholds that allow smaller transfers to bypass compliance checks. Even a transfer worth only a few euros must be reviewed against applicable sanctions lists before being processed.
The move is part of Europe’s broader effort to strengthen financial controls and prevent the misuse of digital assets for sanctions evasion, money laundering, or illegal financial activity.
Every Crypto Transaction Must Pass Sanctions Screening
According to Banca d’Italia’s guidance, crypto service providers must verify information related to both the sender and receiver before completing individual crypto-asset transfers.
Unlike traditional assumptions that small-value transactions carry lower risks, the regulator emphasized that transaction size cannot determine whether compliance checks are required.
This means crypto companies cannot configure their monitoring systems with limits such as:
- Transactions below €100 are ignored
- Small transfers skip automated screening
- Low-value payments avoid compliance reviews
Instead, all transfers must go through automated sanctions screening systems.
However, the requirement does not mean employees must manually approve every small crypto transaction. Most firms can rely on automated tools that compare customer information and transaction details against updated sanctions databases.
If a potential match is detected, the transaction may be delayed for further investigation or rejected depending on the circumstances.
The Requirement Is Not a New Rule
Although Banca d’Italia issued the reminder in September 2026, the requirement itself is not newly introduced.
The obligation comes from European Banking Authority (EBA) guidelines covering internal policies and controls for implementing EU and national restrictive measures.
Banca d’Italia adopted these guidelines through its supervisory Note No. 52 published in May 2025. The rules became applicable in Italy from December 30, 2025.
The requirements apply to several types of financial institutions, including:
- Banks
- Payment institutions
- Electronic money institutions
- Investment firms
- Authorized crypto-asset service providers
These organizations are expected to maintain systems capable of identifying sanctioned individuals, companies, and entities.
The latest communication from Banca d’Italia is therefore a supervisory reminder asking crypto firms to verify that their existing compliance systems are working correctly.
MiCA Authorization Does Not Remove Compliance Duties
The introduction of Europe’s Markets in Crypto-Assets Regulation (MiCA) has created a new licensing framework for crypto companies operating in the European Economic Area.
However, MiCA approval does not replace other regulatory obligations.
Crypto firms must still comply with separate rules related to:
- Sanctions enforcement
- Anti-money laundering controls
- Customer verification
- Transaction monitoring
- Travel Rule requirements
A company receiving MiCA authorization does not automatically prove that its sanctions monitoring systems are effective.
Regulators continue to evaluate whether crypto businesses have proper controls in place to detect suspicious activity and prevent restricted entities from accessing financial services.
Instant Payment Exceptions Do Not Apply to Crypto Transfers
European regulations provide certain exceptions for some instant payment providers. These systems may use alternative screening methods, such as checking their customer databases daily instead of screening every individual transfer.
However, Banca d’Italia clarified that these exceptions do not apply to crypto transfers handled by CASPs.
Crypto companies cannot treat blockchain transactions like traditional instant payments simply because they settle quickly.
Before executing a crypto transfer, providers must still verify the required sender and recipient information.
Crypto Firms Must Review Their Compliance Systems
Following Banca d’Italia’s warning, crypto companies operating in Italy are expected to review their internal compliance processes.
Important areas for review include:
Updated Sanctions Lists
Companies must ensure their screening systems receive regular updates when new sanctions are introduced.
Identity Matching
Compliance tools should be capable of detecting:
- Different name spellings
- Aliases
- Translated names
- Similar identities
Blockchain Monitoring
Crypto businesses may also need blockchain analytics solutions to identify wallet addresses connected to sanctioned individuals or organizations.
Traditional name-based screening alone may not be enough because crypto transactions often involve wallet addresses rather than direct personal identities.
Travel Rule Requirements Remain Important
Alongside sanctions screening, crypto firms must also follow the European Banking Authority’s Travel Rule requirements.
These rules require appropriate information about the originator and beneficiary to accompany crypto transfers.
Missing or incomplete information can create compliance risks and may require additional investigation before processing a transaction.
No Immediate Penalties Announced
Banca d’Italia has not announced any new enforcement actions, investigations, or penalties against specific crypto companies following its reminder.
Instead, the regulator is encouraging firms to verify that their existing systems are correctly configured.
For Italian crypto operators, the next step is reviewing:
- Transaction screening settings
- Sanctions database updates
- Risk management procedures
- Internal investigation processes
- Record-keeping practices
The message from regulators is clear: crypto transfers, regardless of size, must meet the same compliance expectations as other financial transactions.
Conclusion
Banca d’Italia’s latest warning highlights the increasing regulatory pressure on cryptocurrency businesses in Europe.
While the announcement does not introduce a new law, it reinforces an existing requirement that every crypto transfer must be screened for sanctions compliance.
As digital assets become more integrated into traditional finance, regulators are focusing on stronger monitoring systems to ensure crypto platforms cannot be used to bypass financial restrictions.
For crypto companies operating in Italy and across Europe, maintaining reliable compliance infrastructure is becoming a critical part of doing business.
