Tuesday, July 7, 2020

65% of FATF member countries apply cryptocurrency regulations


Key facts:
Of the 54 reporting jurisdictions, 35 have applied the organization's standard.
For the audit group, regulations continue to advance, but there are still challenges to overcome.

Advances to increase regulations against money laundering and terrorist financing, among digital asset or cryptocurrency service providers, are halfway. In its annual report, the International Financial Action Group (FATF) reported that 65% of its members have applied the auditing standards.

In the report entitled "Revision of the FATF Standardized Rules on Virtual Assets and Service Providers", the organization mentioned that of the 54 reporting jurisdictions, 35 have reported their activation. Of that total, 32 members have begun to inspect cryptocurrency exchange houses or other services, for example.

Three other jurisdictions or countries have banned the operation of so-called VASPs or "virtual asset service providers" to process operations with cryptocurrencies. The document does not mention which countries have applied the standards or which are pending.

The global considerations for preparing the report were analyzed for one year. In addition, the FATF emphasized that it will continue to monitor the situation with its member countries and that it will carry out a second review by June 2021.

The institution mentioned that by that date, digital asset service providers will have a second year to make their adjustments and execute the necessary guidelines.

The group admitted that regulations to prevent cryptocurrencies from being used to launder capital or finance terrorist groups have advanced, but said there are still pending challenges. In the presentation of the report, the following was pointed out:

The report reveals that, in general, both the public and private sectors have made progress in implementing the revised FATF standards. 35 of the 54 jurisdictions reported that they have now implemented the standards.
Regarding the figures of private companies, it was reported that the data collected was not sufficient to offer a representative sample.

In another point of the document, the FATF states that there are still 19 members who have not implemented the regulations and that there are still challenges to resolve. In fact, the group said there was no complete accounting for their global network as there are simply countries that do not report. Among the Ibero-American countries that make up the FATF are: Argentina, Brazil, Spain, Mexico and Colombia.

Regulations and cryptocurrencies

The FATF, also known by its acronym FATF (Financial Action Task Force), is an international body that issues guidelines to counter money laundering and terrorist financing. A year ago the group established Recommendation No. 15, which provides guidelines for cryptocurrency-related businesses to "prevent the misuse of virtual assets."

In his agenda for the next cycle, the publication of an updated guide on virtual assets and digital service providers was included. The risks involved in using cryptocurrencies to carry out money laundering transactions and to finance terrorism will also be explored.

Among its guidelines are obtaining accurate information about the participants of cryptocurrency operations to offer them to the corresponding authorities, if necessary. Called "travel rule" it is a requirement applied to banks when there are transactions between them on behalf of their customers.

On the FATF decisions, CryptoNews reported in March last year that the group had recommended applying banking regulations to cryptocurrency exchange houses. In addition, and as a preview of what this report would be, the organization said in April this year that the United States was not fully complying with its recommendations.

Although the group seeks to minimize the use of cryptocurrencies for criminal purposes, ecosystem companies like Circle, Coinbase and Chainalysis have reiterated that adhering to the FATF guidelines on a global scale could be very costly to implement.