Banca d’Italia has warned crypto-asset service providers (CASPs) in Italy that sanctions screening must be carried out on every individual crypto transfer, regardless of its value. Providers must check information on both the originator and beneficiary before executing transactions and must not configure internal systems with minimum transaction thresholds that allow smaller transfers to escape automated screening.
Key Overview
- Banca d’Italia requires sanctions screening for every crypto transfer, regardless of value.
- CASPs must check information on both the originator and beneficiary.
- Internal systems should not use minimum transaction thresholds to exclude low-value transfers from automated screening.
- The requirements stem from European Banking Authority guidelines that have applied in Italy since December 30, 2025.
- CASPs must maintain policies and internal controls to enforce EU financial sanctions.
- MiCA authorization does not replace separate obligations under EU restrictive-measures rules.
Banca d’Italia Tightens Crypto Sanctions Screening
Banca d’Italia has warned crypto-asset service providers (CASPs) that sanctions screening must be conducted on every individual crypto transfer, regardless of its value.
In a new communication on compliance with EU and national restrictive measures, the central bank said firms must check information concerning both the originator and beneficiary before executing a crypto transaction.
The requirement is intended to ensure sanctions controls are applied consistently across transactions, including transfers involving relatively small amounts.
No Minimum Transaction Threshold for Screening
Banca d’Italia has specifically instructed crypto operators not to configure their internal systems with a minimum transaction threshold that could allow smaller transfers to escape automated sanctions screening.
This means CASPs are expected to apply their screening controls across all applicable crypto transfers rather than excluding transactions based on their value.
The central bank said crypto-asset service providers must put policies and internal controls in place to enforce EU financial sanctions when processing crypto transfers.
Providers should also maintain adequate controls to identify customers and transactions connected to sanctioned entities.
Existing EU Requirements Apply to Crypto Transfers
Banca d’Italia said the guidance does not introduce a new sanctions obligation.
Instead, the requirements stem from European Banking Authority guidelines that have applied in Italy since December 30, 2025.
Unlike certain instant-payment arrangements available to payment service providers, the relevant exception does not apply to crypto transfers handled by CASPs.
Italian crypto firms are therefore expected to ensure their existing screening arrangements comply with the applicable requirements.
CASPs Expected to Review Compliance Systems
The communication means Italian crypto firms are expected to review their screening systems, sanctions-list updates and alert procedures to ensure controls operate across all applicable transactions.
The central bank said CASPs should strive to maintain adequate controls capable of identifying customers and transactions linked to sanctioned entities.
The requirements cover the internal policies and controls providers use when processing crypto transfers and enforcing European sanctions.
MiCA authorization does not replace these separate obligations under EU restrictive-measures rules.
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Crypto Transfers and Sanctions Evasion Concerns
The warning comes amid concerns about the use of cryptocurrencies by entities seeking to avoid financial sanctions.
The supplied information states that cryptocurrencies are increasingly being used by Iranian and Russian entities to avoid financial sanctions.
The Russian ruble-backed A7A5 stablecoin processed $110 billion in cumulative transactions between February 2025 and May 2026, despite being targeted by Western sanctions, according to blockchain security platform CertiK.
Iran’s central bank has also reportedly eased foreign currency controls to encourage businesses to use cryptocurrencies such as Tether’s USDt (USDT) and Bitcoin (BTC) to settle cross-border transactions through Iranian exchanges and circumvent sanctions.
Crypto Wallets Linked to Iran
On July 14, US Treasury Secretary Scott Bessent said American authorities had directed a freeze of more than $130 million in crypto held in wallets linked to Iran’s central bank.
In June, blockchain analytics company TRM Labs reported more than $3.8 billion in flows between crypto exchange CoinEx and sanctioned Iranian entities over more than seven years.
These developments highlight the importance of sanctions controls across crypto transactions, including transactions that may otherwise fall below internal screening thresholds.
EU Financial Sanctions Controls
Under the measures outlined by Banca d’Italia, CASPs must establish policies and internal controls to enforce European Union financial sanctions when processing crypto transfers.
The central bank said providers should maintain adequate controls to identify customers and transactions connected to sanctioned entities.
The requirement covers both transaction information and the parties involved, reinforcing the need for screening systems capable of checking transfers without relying on a minimum transaction value.
Outlook
Banca d’Italia’s communication reinforces the requirement for Italian CASPs to apply sanctions screening across every crypto transfer, regardless of transaction value. Providers will need to ensure their internal controls, sanctions-list updates and alert procedures operate consistently across applicable transactions. With the requirements already stemming from EBA guidelines applicable in Italy since December 30, 2025, the focus is on ensuring crypto firms maintain adequate controls to identify sanctioned customers and transactions while complying with EU restrictive-measures rules.
FAQs
1. Does Banca d’Italia require sanctions screening for every crypto transfer?
Yes. CASPs must screen every individual crypto transfer for sanctions, regardless of its transaction value.
2. Can crypto firms set a minimum transaction threshold for sanctions screening?
No. Banca d’Italia has instructed CASPs not to configure systems with a minimum threshold that would allow smaller transfers to escape automated screening.
3. What information must CASPs check before processing a crypto transfer?
Providers must check information on both the originator and beneficiary before executing the transaction.
4. When did the underlying sanctions requirements take effect in Italy?
Banca d’Italia said the requirements stem from European Banking Authority guidelines that have applied in Italy since December 30, 2025.
Sources: Digital Watch Observatory, TradingView, Crypto Briefing, BitKE
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