Financial Action Task Force To Introduce Binding Cryptocurrency Guidelines

News, Regulation | June 13, 2018 By:

The Financial Action Task Force (FATF) is reportedly planning to introduce binding rules governing cryptocurrency exchanges.

Established in 1989, the FATF is an inter-governmental body whose objectives are to set standards and promote effective implementation of measures to combat money laundering, terrorist financing, and other related threats. The FATF currently comprises 37 member jurisdictions and two regional organizations – the European Commission and the Gulf Co-operation Council.

During the FATF meeting in Paris in February of this year, FATF members urged the inter-governmental body to improve the understanding of money laundering risks relating to cryptocurrencies. Member countries were worried that the anonymity and money laundering risks of cryptocurrency transactions had grown with electronic wallets and mixing services that hid the identity of their owner.

In March, the G20 financial policymakers from the world’s top 20 economies (G20) called for regulators to monitor cryptocurrencies. The G20 issued a communique in which it said: “We commit to implement the FATF standards as they apply to crypto-assets, look forward to the FATF review of those standards, and call on the FATF to advance global implementation.”

According to a Reuters report on Tuesday, the FATF will hold discussions later this month to develop rules for governing cryptocurrency exchanges. The report said the rules would be a step up from the non-binding guidelines currently in place. Under the current guidelines, crypto exchanges must be registered or licensed and must verify customers’ identities to prevent money laundering. Any suspicious activity that might have taken place should also be reported.

The FATF crypto-specific discussions, beginning June 24, will re-examine the existing rules to see if they are still relevant and will decide what to do with countries that have moved to ban cryptocurrency trading.