KEY INSIGHTS:
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FATF has stated that a large number of countries have yet to carry out amended rules regarding digital assets and virtual asset service providers (VASPs) like crypto exchanges.
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Without disclosing specific names of the countries included in its report, the agency outlined that out of 128 reporting jurisdictions, only 58 have executed the redrafted FATF standards so far.
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In its recent report, FATF focussed attention on the importance of all jurisdictions executing the new standards as soon as possible.
Worldwide money laundering and terrorist financing inspector organisation – The Financial Action Task Force (FATF) – has stated that a large number of countries have yet to carry out amended rules regarding digital assets and virtual asset service providers (VASPs) like crypto exchanges.
Without disclosing specific names of the countries included in its report, the agency outlined that out of 128 reporting jurisdictions, only 58 have executed the redrafted FATF standards so far. In addition to that, 52 of these have been managing VASPs, with the rest just forbidding their operation.
FATF remarked that such breaks in administration means that even till now we do not have worldwide protection against illegal use of VASPs for terror financing or money laundering.
“The lack of regulation or implementation of regulation in jurisdictions can enable continued misuse of virtual assets through jurisdictional arbitrage.”
-FATF said on Friday.
Going back to June 2019, FATF had concluded the revisions to its worldwide standards so as to distinctly put forward counter terrorism financing and anti money laundering needs on VASPs and digital assets.
FATF had furthermore admitted to take on a 12-month analysis to outline the execution of the amended standards by the private sector and jurisdiction, along with keeping an eye on any alterations in the typologies and threats of the digital assets sector.
In its recent report, FATF focussed attention on the importance of all jurisdictions executing the new standards as soon as possible. Possible future FATF actions were also recognised in the report to put a stop to illegal use of cryptocurrencies.
Meanwhile, it also shone light on the improvement made by the private sector with regards to creating technological solutions allow the execution of “travel rules”.
The “travel rules” of FATF demand crypto exchanges, financial institutions and virtual wallet providers to share identification of users involved in digital assets settlements.
Coming to India, we all know that investing, holding cryptocurrencies, or trading is not prohibited, however the absence of clear regulations regarding crypto is a major reason why investors are worried, as well as the crypto industry.
Read also: CRYPTOCURRENCY REGULATION BILL; THE FUTURE OF CRYPTO IN INDIA
