Key Points:
- The FATF head calls on G7 nations to bring order to the “lawless crypto space”.
- Only 27% of countries are compliant with updated standards on combating money laundering and financing terrorism with crypto.
- The FATF recommends transparency of beneficial ownership and asset recovery to prevent crypto from being used for illicit financial transactions
The Financial Action Task Force (FATF) head T Raja Kumar has written a letter calling on G7 nations to take a more proactive approach in regulating the “lawless crypto space”.
Kumar emphasized that cryptocurrencies still allow illicit financial transactions to occur around the world, and that this poses a major challenge to global financial security.
As the G7 prepares to discuss various agenda items for the year, including the regulation of cryptocurrencies and the overall industry, Kumar has called for “concerted global action” to ensure that no “safe haven” can exist in the financial system of the world for such transactions. The FATF is currently working on “multiple fronts” to help countries combat “digital financial flows” that are “fueling crime and terrorism.”
The FATF has updated its Recommendations, the global standards on combatting money laundering, terrorism financing, and proliferation financing, to include crypto-assets and related financial activity. However, Kumar has expressed concern over the relatively poor progress made by countries in implementing these new standards as part of the Recommendations. As of 2019, only 27% of countries were compliant with the updated standards that include crypto, while the remaining majority of 73% are completely or partially non-compliant and have yet to begin work on supervising the crypto industry.
To address this issue, Kumar recommends that countries focus on two areas to ensure cryptocurrencies cannot be used for illicit financial transactions. The first area is ensuring transparency of beneficial ownership, which is “crucial in fighting money laundering, corruption, tax evasion, and sanctions evasion.” The second area is recovering the proceeds of crimes. Kumar wrote that asset recovery helps strengthen trust in law enforcement as it helps victims directly and is an “effective” method of stopping economic crimes. However, countries have barely done any work on asset recovery and only a small fraction of the global illicit financial flows are ever recovered.
Moreover, Kumar believes that many countries do not have the experience to tackle illicit financial flows when they become digital. To address this challenge, the FATF intends to roll out a new program which will include the so-called “travel rule” to help them adapt. The travel rule will mandate virtual asset service providers like exchanges to pass along information to one another and supervisory bodies for crypto transactions that cross a certain threshold. This will help ensure that countries have the necessary tools to combat illicit financial flows in the digital age.
Kumar’s letter highlights the need for a concerted global effort to regulate the crypto industry and prevent illicit financial flows. While progress has been made in updating the FATF’s Recommendations to include crypto, more work needs to be done to ensure that these standards are implemented by countries. By focusing on transparency of beneficial ownership and asset recovery, countries can help prevent illicit financial flows and strengthen trust in law enforcement. The FATF’s new program, which includes the travel rule, will also help countries adapt to the new digital landscape and combat financial crime effectively.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Join us to keep track of news: https://linktr.ee/coincu
Annie
Coincu News
Author
News
FATF Chief Demands Action Against Crypto Anarchy
Key Points:
- The FATF head calls on G7 nations to bring order to the “lawless crypto space”.
- Only 27% of countries are compliant with updated standards on combating money laundering and financing terrorism with crypto.
- The FATF recommends transparency of beneficial ownership and asset recovery to prevent crypto from being used for illicit financial transactions
The Financial Action Task Force (FATF) head T Raja Kumar has written a letter calling on G7 nations to take a more proactive approach in regulating the “lawless crypto space”.
Kumar emphasized that cryptocurrencies still allow illicit financial transactions to occur around the world, and that this poses a major challenge to global financial security.
As the G7 prepares to discuss various agenda items for the year, including the regulation of cryptocurrencies and the overall industry, Kumar has called for “concerted global action” to ensure that no “safe haven” can exist in the financial system of the world for such transactions. The FATF is currently working on “multiple fronts” to help countries combat “digital financial flows” that are “fueling crime and terrorism.”
The FATF has updated its Recommendations, the global standards on combatting money laundering, terrorism financing, and proliferation financing, to include crypto-assets and related financial activity. However, Kumar has expressed concern over the relatively poor progress made by countries in implementing these new standards as part of the Recommendations. As of 2019, only 27% of countries were compliant with the updated standards that include crypto, while the remaining majority of 73% are completely or partially non-compliant and have yet to begin work on supervising the crypto industry.
To address this issue, Kumar recommends that countries focus on two areas to ensure cryptocurrencies cannot be used for illicit financial transactions. The first area is ensuring transparency of beneficial ownership, which is “crucial in fighting money laundering, corruption, tax evasion, and sanctions evasion.” The second area is recovering the proceeds of crimes. Kumar wrote that asset recovery helps strengthen trust in law enforcement as it helps victims directly and is an “effective” method of stopping economic crimes. However, countries have barely done any work on asset recovery and only a small fraction of the global illicit financial flows are ever recovered.
Moreover, Kumar believes that many countries do not have the experience to tackle illicit financial flows when they become digital. To address this challenge, the FATF intends to roll out a new program which will include the so-called “travel rule” to help them adapt. The travel rule will mandate virtual asset service providers like exchanges to pass along information to one another and supervisory bodies for crypto transactions that cross a certain threshold. This will help ensure that countries have the necessary tools to combat illicit financial flows in the digital age.
Kumar’s letter highlights the need for a concerted global effort to regulate the crypto industry and prevent illicit financial flows. While progress has been made in updating the FATF’s Recommendations to include crypto, more work needs to be done to ensure that these standards are implemented by countries. By focusing on transparency of beneficial ownership and asset recovery, countries can help prevent illicit financial flows and strengthen trust in law enforcement. The FATF’s new program, which includes the travel rule, will also help countries adapt to the new digital landscape and combat financial crime effectively.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Join us to keep track of news: https://linktr.ee/coincu
Annie
Coincu News
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