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The FATF Announces the Need for New Guidelines for the Crypto Industry

08 July 2020 16:40, UTC
The FATF Announces the Need for New Guidelines for the Crypto Industry

The new president of the FATF Anti-Money Laundering Development Group, Marcus PLEYER, considers it necessary to amend the guidelines for the cryptocurrency industry, as many countries still have not fully implemented previously accepted standards.

Marcus Pleyer, who also holds the post of Deputy General Director of the German Ministry of Finance, took over the powers of the FATF President on July 1. In this post, he succeeded Xiangmin Liu from China and will lead the organization for the next two years. On June 24, the FATF held a virtual plenary meeting, on the agenda of which the issue of preventing the risks of money laundering and the financing of terrorism using virtual assets were categorized as strategic initiatives.

Regarding the new standards adopted by the organization, Marcus Pleyer said that under the German presidency, it is planned to continue the work done earlier with a focus on the possibilities that the new technology can offer. With the development of new technologies and blockchain, it is widely being incorporated into various financial markets. However, the extreme regularization of the blockchain industry became a problem and everybody is opposing it.

The Forex market which is arguably the most regulated network in the world, despite these regulations, there are advantages of Forex trading that crypto cannot reach right now. If a comprehensive regulatory framework is adopted then we can talk about a path to the stage, where crypto is also advantageous for people.

The FATF noted that over the past 12 months, the public and private sectors have made progress in the application of new standards, especially in the development of technological solutions for the implementation of the so-called “road rule” for virtual asset service providers (VASPs). A review of these standards is not required by the organization, but additional guidance is needed.

The FATF statement said that this would help members of the FATF global network, many of whom have not yet fully implemented the new standards, achieve the necessary progress. A corresponding report evaluating how countries are implementing these standards will be presented in June 2021.

Also, at the plenary session, the issue of global stablecoins was raised. At the request of the G20, the FATF prepared a separate report on this topic, which states that potentially stablecoins can change the state of the digital currency ecosystem and have a negative impact on money laundering and terrorist financing.

In this regard, the FATF stated the need for close monitoring of this sector, including anonymous p2p transactions through non-custodial wallets. Recall that in May the Chamber of Digital Commerce, the Organization of World Digital Finance and the International Association of Digital Asset Exchanges introduced the IVMS101 data exchange standard, aimed at more efficient implementation of the FATF requirements.

We can also recall that in November last year, the FATF Anti-Money Laundering Development Group (DATF) introduced a draft digital identification guide for government agencies and regulated entities to ensure compliance with anti-money laundering (AML) and terrorist financing (CFT) rules. This guide also applies to cryptocurrency and blockchain companies.

As time passes, the cryptocurrency regulations gain a foothold in the financial system. For some people, unfortunately, it is considered to be the betrayal for the original values, on which cryptos were initially founded.

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