Italy’s Central Bank Mandates Sanctions Screening for Crypto Transfers

Italy’s central bank, Banca d’Italia, announced that crypto asset service providers (CASPs) must adopt mandatory sanctions‑screening procedures for cryptocurrency transfers. The move is intended to strengthen the EU’s ability to detect and block illicit financial flows.

New Compliance Requirements

CASPs are now required to establish policies and internal controls that identify customers and transactions associated with entities subject to EU financial sanctions. The bank emphasized that robust screening is essential for preventing the misuse of crypto assets in sanction‑evasion schemes.

Sanction‑Evasion Concerns

Authorities have highlighted the growing use of cryptocurrencies by Russian and Iranian actors to bypass sanctions. Notably, the ruble‑backed stablecoin A7A5 processed $110 billion in transactions between February 2025 and May 2026 despite Western sanctions, according to CertiK. Iran’s central bank has reportedly relaxed foreign‑currency controls to encourage the use of Tether’s USDT and Bitcoin for cross‑border settlements.

Recent Enforcement Actions

• U.S. Treasury officials froze more than $130 million in crypto held in wallets linked to Iran’s central bank.
• TRM Labs identified over $3.8 billion in flows between the exchange CoinEx and sanctioned Iranian entities over a seven‑year period.

Implications for the Crypto Industry

The Banca d’Italia directive adds to a broader regulatory trend in Europe, where authorities are tightening oversight of crypto transactions to align with sanctions regimes. Crypto service providers operating in Italy will need to integrate screening tools and update compliance frameworks to meet the new requirements.