Paris-based global money laundering watchdog organization Financial Action Task Force (FATF) laid out requirements on Friday for jurisdictions across the globe, saying they would have to license or regulate their crypto exchanges.
FATF amends its global Standards to address the regulation of virtual assets and prevent their misuse for #moneylaundering and #terroristfinancing
➡️https://t.co/R5R7j484Td pic.twitter.com/mOqeY25aJd— FATF (@FATFNews) October 19, 2018
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Stepping up Efforts Against Money Laundering
The FATF described an “urgent need” to combat crypto’s use in laundering money and paying for illegal services in its official announcement, stating:
“Virtual assets and related financial services have the potential to spur financial innovation and efficiency and improve financial inclusion, but they also create new opportunities for criminals and terrorists to launder their proceeds or finance their illicit activities. The FATF has therefore been actively monitoring risks in this area, and issued guidance on a risk-based approach to virtual currencies in 2015. There is an urgent need for all countries to take coordinated action to prevent the use of virtual assets for crime and terrorism.”
The announcement went on to add that certain wallet providers and ICOs would be subject to the updated requirements and recommendations surrounding virtual assets, which the FATF has redefined in its new set of rules.
The organization expressly separates digital assets from fiat but will build on the existing anti-money-laundering (AML) rules in place for fiat currency.
Jurisdictions that feel the need to prohibit digital asset use will be allowed to do so if they deem it too great of a risk for money laundering. Also, regulation of digital assets will not be necessary as long as such prohibitions are enforced.
The announcement also states that existing exchanges and wallet providers should be regulated in all jurisdictions where permitted and that entities conducting ICOs should be as well.
FATF President Marshall Billingslea said in an interview with Reuters that the watchdog would “issue additional instructions on the standards and how we expect them to be enforced” by June.
Billingslea also told Reuters that the FATF would undertake routine examinations of how countries are implementing the new rules once they’re rolled out and adapt from there, with the possibility of a blacklist for non-compliance.
Different countries have, until now, taken different approaches to their cryptocurrency markets. Japan was the first to regulate its crypto exchanges last year, and Gibraltar has put a strong regulatory framework in place to attract more reputable partners. Conversely, China and South Korea have cracked down on crypto. The United States is ramping up regulatory efforts by giving institutions like the Commodity Futures Trading Commission (CFTC) power to prosecute fraud.
Who is the FATF?
Established in 1989, the Financial Action Task Force’s job is to “combat money laundering, terrorist financing and other related threats to the integrity of the international financial system,” according to its website. Its recommendations for AML measures were first issued in 1990 and updated regularly, with the newest iteration coming this year.
Their governing body, the FATF Plenary, meets three times a year to discuss threats to the global financial system. There are 36 FATF member countries including Russia, China, Australia, France, Germany, Brazil, Canada, the UK, and the U.S.
The post Crypto Money Laundering Rules to Be In Place by June, Says FATF appeared first on CryptoSlate.
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