FATF Set to Revamp Guidelines for Cryptocurrencies and Virtual Asset Service Providers

FATF’s New Guidelines Are Coming Soon

Get ready, because the Financial Action Task Force (FATF) has just dropped a bombshell! They’re planning to revamp their guidelines for cryptocurrencies and virtual asset service providers (VASPs), which include everything from exchanges to wallet providers and those enigmatic custody platforms. Who knew such a variety of financial entities could exist under one catch-all term?

What’s the Big Deal?

Why should you care? Well, the FATF, an intergovernmental organization that’s all about fighting money laundering and terrorist financing, is holding a public consultation that will allow stakeholders to voice their opinions. Talk about democracy in action, right? They aim to unveil the updated guidelines in the first week of March, following a three-day plenary session filled with intense discussions and probably way too much coffee.

A Quick Blast from the Past

Let’s rewind a bit. The new guidelines will be an update to the ones released back in June 2019, which introduced the infamous travel rule for VASPs. This rule requires all VASPs to share transaction data—including who sent what and to whom—when transferring funds. So, if you thought you could send crypto without leaving a trace, think again. The FATF has its eyes everywhere!

Progress Report: How Are They Doing?

In its 12-month review from June 2020, the FATF indicated that some progress had been made in adhering to the crypto travel rule. In a hilariously ironic twist, U.S.-based VASPs have shown significant compliance, suggesting that the land of freedom is also keen to keep its financial transactions above board. Meanwhile, Asian countries, particularly those in Singapore and South Korea, are flexing their regulatory muscles and showing top-tier compliance levels.

What’s Next on the Agenda?

The updated guidelines aren’t just about the travel rule; they’re also poised to address stablecoins and the fascinating world of peer-to-peer crypto transactions. And don’t worry; the FATF isn’t oblivious to the decline of illicit transactions. According to the 2020 crypto crime report by blockchain intelligence firm Chainalysis, crime-related transactions made up a mere 0.34% of all crypto activities last year. Now that’s a decline worth celebrating!

Wrapping It Up

As we sit on the edge of our seats waiting for more insights from the FATF, one thing is clear: the cryptocurrency landscape is evolving, and compliance is becoming key to ensure that digital assets don’t end up in the murky depths of illegal activity. So, grab your popcorn; it’s going to be an interesting ride!