The Financial Action Task Force (FATF) is almost ready for establishing a global set of anti-money laundering (AML) standards of cryptocurrency, as reported on September 19 by Financial Times. According to many reliable sources, it is expected to discuss at the FATF plenary by October as ordered by G20 summit.
FATF, an international organization, was established in 1989, as a platform that works for developing policies, laws, regulatory actions and standard best suited to fight against money laundering and crime. The main objective of the agency is to expand their activities further which can work against terrorism financing issues. As the world is becoming aware of cryptocurrencies and blockchain, there has been an increasing number of cases of money fraud, illegal activities or transaction made using crypto and an upsurge in potential scams and hacks. It makes it important to acknowledge a set of AML standards and impose them on a global economy.
Marshall Billingslea, FATF’s president, also said that he is expecting coordination between series of standards. He says that the new standards are likely to close the gap between the AML standards that are currently in motion among the global network dealing with cryptocurrency, crypto mining, crypto exchanges and more. Billingslea expects them for discussion at the FATF plenary. G20 nations seek cryptocurrency AML regulation standards by October 2018.
At this meeting, the FATF will discuss and brainstorm ideas that are related to the current scenario. It will discuss the existing standards that should maintain in action and adapted for the digital currency regulatory standards too. Furthermore, the meeting is considered to reinstate and reform the assessment procedures which will confirm ways for the countries and authorities to implement the new standards. According to Billingslea, they will also be outlining the importance of creating standards that are uniform in nature to have a systematically similar application all around.
Billingslea terms the existing AML standards and series of regulatory actions meant for the cryptocurrency, to be “patchwork quilt process, that is creating dramatic vulnerability to both national and international financial systems.” He further stated that these types of assets always comes with risks that are inherent to the asset class, especially when it comes to cryptocurrency and digital currency and yet it still presents a great opportunity.
According to the Cointelegraph reports, FATF was gearing up for development of binding rules for cryptocurrency exchanges in June. The rules slanted to release in October are expected to be an upgrade of non-binding rules that approved in June 2015. The agency will take into consideration the existing rules to see whether they are appropriate for guidelines of AML measures and suspicion over trading activity. If they seem to lack the possible measures needed for such issues, the new rules will be taken into consideration and applied to exchanges.
Earlier this week, Bruegel also asked for proper unified legislation on cryptocurrency and more consideration over how the cryptocurrencies distribute to investors. According to Bruegel, virtual nature of crypto limits regulatory actions, but there can be “regulatory arbitrage” still possible for the crypto regulation approach.