USs FinCEN and G20 Countries Could Adopt FATFs Crypto Guidance

USs FinCEN and G20 Countries Could Adopt FATFs Crypto Guidance

The Financial Action Task Force (FATF) has published guiding regulations on combating money laundering and financial terrorism using virtual assets.

FATF is an intergovernmental organization that develops policies to essentially tackle international money laundering as well as financial terrorism. As such, the regulations will aim at ensuring these issues are mitigated. Notably, FATF has 37 member countries who share a common interest in having regulations to streamline this sector.

FATFs new standards will require virtual asset service providers (VASPs), including crypto exchanges to pass information about customers between each other as they conduct transactions. Accordingly, this can empower all the exchanges with the ability to track and report suspicious transactions.

As a matter of fact, FATF views the issue of misuse of crypto for illegal ends as an urgent and serious issue. Therefore, FATF has given countries a year to review and possibly adopt these new measures before the next review in June 2020.

Moreover, the rules require individuals who have crypto wallets on exchanges be subject to licensing requirements. This is if they run the wallet as a business. As such, member countries will be free to develop licensing requirements in line with jurisdiction-specific rules.

Individuals who use crypto to buy and sell goods and services or make on-off transfers will be exempt. Member countries should, therefore, register business wallets as VASPs. The regulations state that the overall aim of the measures as follows:

Competent authorities should take the necessary legal or regulatory measures to prevent criminals or their associates from holding, or being the beneficial owner of, a significant or controlling interest, or holding a management function in, a VASP.

Impact of The Measures

First of all, it is important to note that the FATF regulations are not binding. These are essentially proposals that member countries choose whether to adopt or not. This means that enforcement is not automatic and uniform.

As such, an entity like FinCEN in the United States has more direct impact on crypto regulation than FATF. FATF provides an oversight and policy framework but it is definitely up to agencies like FINCEN or the G20 to enforce the measures. The Anti-Money laundering and CFT regulations from FINCEN have a direct impact on exchanges in that institution.

Some crypto enthusiasts will be up in arms over this. This is because any attempt to regulate crypto, to some, is another example of regulatory overreach and attempts at centralization. Others will look at the importance of keeping crypto elements from tarnishing crypto forever.

Either way, the measures can significantly shape crypto in the short and long-term. There will certainly be a drop in crypto-services if the rules come into effect soon. Nonetheless, the remaining ones will attain a higher level of transparency and lawful operation.

Adoption by The G20

The G20 group of nations has already signaled that it will align with the FATF regulations in due course. This is in the form of a communique on the Japanese Ministry of Finance. Notably, this comes after a meeting over the weekend in Fukuoka, Japan.

The adoption by the G20 will certainly signal a fundamental transformation of the crypto landscape. Regulations on KYC and more effective monitoring in the worlds most powerful economies will certainly have wide impact. Accordingly, the balance between crypto regulation and nurturing innovation will remain an important debate for years to come.

The post USs FinCEN and G20 Countries Could Adopt FATFs Crypto Guidance appeared first on Ethereum World News.

24.06.2019 / 04:30 46
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