FATF agrees on roadmap for implementation of crypto standards

The Financial Action Task Force, or FATF, reported its delegates had come to an agreement on an action plan “to drive timely global implementation” of global standards on cryptocurrencies.

In a Feb. 24 publication, the FATF said the plenary for the financial watchdog — consisting of delegates from more than 200 jurisdictions — met in Paris and came to a consensus on a roadmap aimed at strengthening “implementation of FATF Standards on virtual assets and virtual asset service providers”. According to the task force, in 2024 it will report on how FATF members have moved forward on implementing the crypto standards, which includes regulation and supervision of VASPs.

“The lack of regulation of virtual assets in many countries creates opportunities that criminals and terrorist financiers exploit,” said the report. “Since the FATF strengthened its Recommendation 15 in October 2018 to address virtual assets and virtual asset service providers, many countries have failed to implement these revised requirements, including the ‘travel rule’ which requires obtaining, holding and transmitting originator and beneficiary information relating to virtual assets transactions.”

Part of the FATF’s ‘Travel Rule’ includes recommendations that VASPs, financial institutions, and regulated entities in member jurisdictions obtain information on the originators and beneficiaries of certain virtual currency transactions. As of April 2022, the financial watchdog reported that many countries were not in compliance with its standards on Combating the Financing of Terrorism (CFT) and Anti-Money Laundering (AML).

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Japan, South Korea and Singapore have been among the countries seemingly most willing to implement regulations in accordance with the travel rule. Some nations including Iran and North Korea have reportedly been placed on the FATF’s ‘grey list’ for monitoring suspicious financial activity.