Italy’s Banca d’Italia orders mandatory sanctions screening for crypto transfers

Italy’s central bank has told crypto asset service providers (CASPs) to put policies and internal controls in place to enforce EU financial sanctions when processing crypto transfers. For high-risk payment operators, the message is plain enough: crypto flows are now being treated less like an edge case and more like a sanctions-screening problem.

1. Banca d’Italia said in a Monday announcement that CASPs must apply mandatory sanctions screening for cryptocurrency transfers to help curb illicit flows across the EU.
2. The bank said CASPs should strive to maintain adequate controls to identify customers and transactions linked to sanctioned entities. In practice, that means sanctions compliance can no longer sit as a checkbox at onboarding if the transfer rail itself is exposed.
3. The broader backdrop is already familiar to anyone running risk on crypto rails: 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, according to blockchain security platform CertiK, despite Western sanctions.
4. 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) for cross-border settlement through Iranian exchanges and to circumvent sanctions.
5. US authorities have been active on the enforcement side as well. 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, TRM Labs reported more than $3.8 billion in flows between crypto exchange CoinEx and sanctioned Iranian entities over more than seven years.

For PSPs, acquirers, and banks that touch crypto-adjacent flows, the operational point is not subtle: sanctions screening now needs to reach the transaction layer, not just the account-opening layer. That is where the exposure sits, and that is where regulators are looking.