Italy’s central bank orders sanctions screening for crypto transfers

Banca d’Italia has ordered cryptocurrency asset service providers to adopt internal policies and controls aimed at detecting transfers tied to entities under EU sanctions. The central bank said these measures should enable firms to identify customers and transactions associated with sanctioned parties when processing crypto transfers. The directive frames the requirement as part of broader efforts to curb illicit cross-border flows of value via digital assets. Banca d’Italia’s guidance applies specifically to crypto asset service providers (CASPs), instructing them to embed sanctions screening into their compliance programs. The move follows a series of reports and enforcement actions highlighting how cryptocurrencies have been used to circumvent sanctions. Blockchain security firm CertiK reported that the ruble-backed A7A5 stablecoin handled about $110 billion in cumulative transactions from February 2025 through May 2026, despite being a target of Western sanctions. Separately, analytics firm TRM Labs identified over $3.8 billion in flows between crypto exchange CoinEx and sanctioned Iranian entities across a period of more than seven years. U.S. authorities have also taken action related to crypto and Iran: Treasury officials said over $130 million in crypto linked to Iran’s central bank was frozen, underscoring international enforcement activity. Against this backdrop, Italy’s requirement for mandatory screening of crypto transfers represents a regulatory attempt within the EU to strengthen compliance and reduce opportunities for sanctions evasion.