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Submitted by Newsroom on Tue, 11/06/2018 - 16:25
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FATF

 

FATF to set up international rules for cryptocurrencies by June 2019

The Financial Action Task Force (FATF), the international watchdog for money laundering, will set up its first rules on oversight of cryptocurrencies by June. 

As reported by Reuters, the Paris-based organisation made this announcement at its 2018 plenary session. FATF said jurisdictions worldwide will be required to license or regulate “virtual asset service providers”- such as cryptocurrency exchanges, certain types of wallet providers, and providers of financial services for Initial Coin Offerings (ICOs)- to help in eradicating problems related to use of digital currencies for money laundering, terrorist financing, and other crimes.

“By June, we will issue additional instructions on the standards and how we expect them to be enforced,” the news agency quoted the FATF President Marshall Billingslea as saying.

Billingslea also suggested that the watchdog will conduct periodic reviews on how national governments implement their cryptocurrency-related rules. The countries that fall short of the agency’s guidelines could be added to the FATF blacklist, which restricts access to the international financial system. 

FATF President Marshall Billingslea
FATF President Marshall Billingslea Photo: Les Echos

The task force, however, emphasised that countries are at liberty to decide under which 
anti-money laundering (AML) and counter-terrorism financing (CFT)  category of regulated activities to classify digital currency providers. 

Until now, cryptocurrencies have managed to gain the attention of governments but their regulation has defied global coordination. The move by the FATF  to achieve a standardised, coordinated regulatory framework for the cryptocurrency industry is in response to various calls from private and public institutions for clarity about how its standards apply to businesses involved with crypto-related activities.

Last year, Japan became the first country to regulate cryptocurrency exchanges. Its top financial regulator mandated all cryptocurrency operators to register with the government. In Europe, Malta issued laws to oversee ICOs and crypto financial service providers.

A publication on the FATF website gives further information about the organisation’s plan. 

The FATF, also known as the Groupe d’action financière, is an intergovernmental organisation established in 1989 at the initiative of the G7 with the aim of developing standards to fight money laundering and other illicit forms of financing.

The FATF currently comprises 35 member jurisdictions and 2 regional organizations, namely the European Commission and the Gulf Cooperation Council.

Member countries include China, France, Germany, India, Japan, South Korea, Russia, South Africa, Sweden, Turkey, United Kingdom and the United States. The FATF also maintains a blacklist of non-cooperative and high-risk countries. 

Looks like soon, nations will close the anti-money laundering “gaps” created by the virtual currency space.