After a surge in terrorist atrocities pushed the supply of funds to illicit organisations up the political agenda, in February the EC set out proposals to make amendments to the recently introduced Fourth Anti-Money Laundering Directive.

In July the Commission confirmed that among the changes it is adopting is bringing virtual currency exchange platforms and custodian wallet providers under the scope of the directive.

In a new opinion, the EBA welcomes the proposal but asks the EC to rethink its timeline. Member states have a legal obligation to transpose the directive by 26 June 2017 but have committed to do so early - by this December.

As a consequence, the EBA says that the Commission "appears" to have decided to bring forward the legal deadline, including amendments related to virtual currencies to 1 January 2017.

This, argues the EBA, is a mistake because "the proposed amendments come at a time when most Member States are still consulting on changes to their national legal and regulatory framework, which risks exacerbating the already considerable legal uncertainty for both national authorities and obliged entities".

Therefore, says the EBA, the transposition deadline for the amendments should be set as the 26 June date "at the very earliest".

Elsewhere, the opinion backs the EC's decision to keep virtual currency transactions outside of the scope of PSD2 "for now".

In addition, the EBA says that the EC must ensure that consumers and businesses do not misunderstand the status of virtual currencies exchanges and wallet providers. Just because they are subject to AML rules does not mean that consumer protection or prudential safeguards are in place.

"The lack of awareness of the meaning of the amendments may be further exacerbated by VCEPs and CWPs deliberately or unintentionally describing themselves as 'regulated' or 'authorised', thereby implying that respective regulatory safeguards are in place that actually are not."

One way to help combat misunderstanding would be for legal entities - such as banks - that carry out regulated activities to not be allowed to carry out virtual currency transactions.

The EC's proposals still need to be approved by the EU Parliament and member states before they become law.

Read the full opinion here: