According to the latest information from Financial Times, the Financial Action Task Force (FATF) is getting closer to the establishment of global AML regulations (anti-money laundering standards) related to cryptocurrencies.
As Marshall Billingslea stated for reporters, he sees joint efforts in October to prepare comprehensive AML standards, regulating even the gaps that exist now.
Moreover, FATF will keep discussion about the respective standards that should be adapted to cryptocurrencies, while takings steps for the purpose of methodical assessment how can participating countries take approach to implement such standards.
Billingslea did not forget to highlight the importance of these standards that are planned to be prepared in a way of their subsequent application in a uniform manner. The actual AML framework related to the digital currencies he called as a “patchwork quilt or spotty process” what results in a vulnerable regulation in different countries, but also from the international point of view.
Despite this fact, Bilingslea still sees cryptocurrencies as “a great opportunity” that should not be omitted. According to the report from Cointelegraph, the FATF was intending to put efforts into the development of new binding regulation related to cryptocurrency exchanges.
Previous regulation of this kind came in June 2015, but it was only of a non-binding nature, so this new set represents an upgrade thereto. The FATF was forced to reconsider its existing guidelines on AML measures and reporting of any suspicious trading activity and if there is a way of their application for the exchanges.
Now, with the implementation of CRS in number of less regulated countries, couple of popular destinations for standard forex brokers lost their shine and are not going to be that attractive for crypto exchanges as well due to the reporting of ultimate beneficial owners as a part of the due diligence procedure, where also the AML rules are being upgraded.
Therefore, crypto exchanges are about to expect more sophisticated regulation over the next decade. The Belgian think-tank Bruegel called even for a unified legislation on digital currencies and stronger supervision over their distribution to investors. According to Bruegel, the nature of digital currencies poses limits to the development of respective, above-mentioned regulations, adding that only case-by-case consideration could be the right path.
The FATF was established in 1989 as an international organization on the basis of G7 initiative for the purpose of setting up respective standards and policies against money laundering. Due to the international development over the next two decades, competences of the FATF were extended to terrorism financing suppression. Now, there are 35 member jurisdictions participating in the FATF and 2 regional organizations.