The FATF [Financial Action Task Force], an intergovernmental organization which develops rules and policies against ML [Money Laundering], has revealed preliminary guidelines for crypto assets on its ‘web-site‘.
FATF recently held its meeting on preliminary cryptocurrency requirements on 22nd Feb. Per the organization, the new text of the Interpretive Note to Recommendation 15 – that contains requirements for regulating and digital asset services suppliers – has been finalized.
Moreover, the FATF expects to profit from private sector consultations that are expected for May, asking entrepreneurs to send their comments to the organization by 8th April. Once the recommendations are finalized, it could be formally adopted by the FATF. The final meeting is expected by June, this year.
Primarily, the task force urges countries to follow tips and guidelines for preventing money laundering and terrorism funding with cryptocurrencies — an amendment from a previous edition signed in 2018.
Moreover, cryptocurrency providers are obliged to be commissioned or registered within the jurisdictions they were created, and their owners have to offer identity info to relevant authorities. The FATF conjointly adds that crypto product’s should generally be certified, ought to the host country requirements.
The guidelines conjointly compel governments to make adequate regulation and monitoring over digital assets. The FATF emphasises that supervision must be conducted by a competent authority rather than a self-regulatory body so as to successfully prevent money laundering and terrorism funding. The country that applies the rules should conjointly establish criminal, civil or administrative sanctions for violating the principles.
Finally, the FATF obliges ‘crypto asset‘ suppliers to obtain and keep records of senders and beneficiaries of crypto transfers, and to offer the data to acceptable state or international authorities as per any requirement. If a transaction is suspected to be illicit, the country ought to take measures to freeze the action or halt the transfer.
The FATF presently has over thirty ‘member countries‘. The European countries constitute the major proportion of the member states, along with U.K., Switzerland, Germany, France and others. Whereas the organization primarily issued a “risk-based-approach” guideline for cryptocurrencies earlier in ‘2015‘, the organization updated it later last year following the pop of the ICOs [initial coin offerings] bubble that began earlier in 2017.