Financial Action Task Force To Establish Rules For Crypto Regulation By June 2019br>
The Financial Action Task Force (FATF), a global money-laundering watchdog, is planning to publish its first rules on oversight of cryptocurrencies by June 2019.
The Paris-based money-laundering watchdog announced on Friday that the rules would be an upgrade from guidelines currently in place and would require jurisdictions worldwide to license or regulate crypto exchanges and digital wallet providers. Issuers of initial coin offering (ICO) will also be included.
FATF President Marshall Billingslea said that they would conduct periodic reviews as to how the countries are implementing the new rules. Countries judged to be falling short could be added to a FATF blacklist that restricts access to the global financial system.
“By June, we will issue additional instructions on the standards and how we expect them to be enforced,” Billingslea said.
The FAFT has been actively monitoring risks in the crypto market, and issued guidance on a risk-based approach to cryptocurrencies in 2015. Once the new rules have been released, jursdictions will have flexibility to decide under which Anti-Money Laundering/ Counter Financing of Terrorism (AML/CFT) category of regulated activities crypto service providers should be regulated, e.g. as financial institutions, DNFBPs, or as another, distinctive category.
“The FATF will provide clarification to jurisdictions in managing the ML and TF risks of virtual assets, while creating a sound AML/CFT regulatory environment in which companies are free to innovate,” the watchdog said. “As part of a staged approach, the FATF will prepare updated guidance on a risk-based approach to regulating virtual asset service providers, including their supervision and monitoring; and guidance for operational and law enforcement authorities on identifying and investigating illicit activity involving virtual assets.”