- The Financial Action Task Force (FATF) has reviewed its implementation of cryptocurrency regulation norms over the past 12 months.
- Virtual assets involved in money laundering or terrorism financing have decreased significantly over a couple of years.
- Many plan to use the software designed for blockchain analysis for proper implementation of the travel rule.
The Financial Action Task Force (FATF) has reviewed its implementation of cryptocurrency regulation norms over the past 12 months. A few jurisdictions have made progress. However, some are yet to implement the regulations. Additionally, there is no explicit need to make further changes to the recommendations—red flag indicators published by October 2020 supported by relevant case studies.
FATF’s 12 Month Review In Detail
Per FATF’s report, Virtual assets involved in money laundering or terrorism financing have decreased significantly over a couple of years. Virtual Asset Service Providers used with less effective regulation that had led to an increase in narcotics-related fraud offenses. Of the 32 jurisdictions that have refined permitting the use of VASPs, 23 have already begun registration of the same.
Many plan to use the software designed for blockchain analysis for proper implementation of the travel rule. The travel rule elucidates the origin of the transaction and the destination as well. A lack of technology solutions has lead to list implementation of the travel rule globally.
Notable Issues Yet To Be Overcome
FATF’s report further mentioned that there was redundancy in the implementation of regulations. Discrepancies in record keeping and disoriented top management were major issues discovered. A global framework for travel rule implementation is absent. Measures need to be taken to identify counterparty VASPs.
Review Period Extended Till June 2021
The enhanced monitoring will continue till the halfway mark of next year. Furthermore, jurisdictions will get two years to implement all the regulations and recommendations put forth by FATF. They plan to eradicate issues regarding peer-to-peer transactions and stablecoins as well.
FATF’s committee has set global cooperation concerning VASP supervisors. Furthermore, plans are in place to interact and engage with the private sector regularly. Consistency needs to be maintained by the jurisdictions implementing the changes in cryptocurrency laws. Lastly, a list containing all the forms of financial crimes that might take place will be released in October 2020. It will help prevent loss of faith among infectious in virtual assets. A sense of conformity will prevail among all parties that digital assets may become the driving force of an economy.
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