FATF agrees on roadmap for implementation of crypto standards

The Financial Action Task Force, or FATF, reports that delegates have reached an agreement on an action plan “to drive the timely global implementation” of global standards on cryptocurrencies.

In a February 24 publication, the FATF said that a plenary meeting of financial supervisors – including delegates from more than 200 jurisdictions – met in Paris and reached consensus on a road map aimed at strengthening “implementation of FATF Standards on virtual assets and virtual asset service providers”. According to the task force, in 2024 it will report on how FATF members have progressed in implementing crypto standards, which include VASP regulation and supervision.

“The lack of regulation of virtual assets in many countries creates opportunities that criminals and terrorist financiers exploit,” the report said. “Since the FATF strengthened Recommendation 15 in October 2018 to address virtual assets and virtual asset service providers, many countries have failed to implement these revised requirements, including the ‘travel rules’ that require obtaining, holding and transmitting information on origin and related beneficiaries with virtual asset transactions.

Part of the FATF’s ‘Rules of Travel’ includes recommendations that VASPs, financial institutions, and regulated entities in member jurisdictions obtain information about the originator and beneficiary of certain virtual currency transactions. In April 2022, the financial watchdog reported that many countries did not meet standards on Combating the Financing of Terrorism (CFT) and Anti-Money Laundering (AML).

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Japan, South Korea and Singapore are among the countries that are most willing to implement regulations in line with travel rules. Several countries including Iran and North Korea have reportedly been placed on the FATF’s ‘grey list’ to monitor suspicious financial activities.