Over 200 Jurisdictions Agree on Timely Implementation of FATF Crypto Standards

The Financial Action Task Force (FATF), an intergovernmental organization established to combat money laundering and the financing of terrorism, announced on Friday the outcome of its plenary which took place on Feb. 22-24. “Delegates from over 200 jurisdictions of the Global Network participated” in a number of discussions at its headquarters in Paris, the FATF said. A number of issues, including those relating to crypto assets, were discussed.

The FATF revealed that many countries have failed to implement its previous requirements on crypto, including the “travel rule” which requires obtaining, holding and transmitting originator and beneficiary information relating to virtual assets transactions. The global anti-money laundering watchdog further announced that delegates at the plenary agreed on an action plan to drive timely global implementation of FATF standards relating to virtual assets (also termed crypto assets) globally, including on the transmission of originator and beneficiary information.

The FATF relies on a global network of FATF-Style Regional Bodies (FSRBs), in addition to its own members, to achieve global implementation of its recommendations. The plenary thus agreed on a roadmap to strengthen implementation of FATF standards on virtual assets and virtual asset service providers, which will include a stocktake of current levels of implementation across the global network.

“The lack of regulation of virtual assets in many countries creates opportunities that criminals and terrorist financiers exploit,” the FATF claimed. The FATF also noted that in the first half of 2024, it will report on steps FATF members and FSRB countries with materially important virtual asset activity have taken to regulate and supervise virtual asset service providers.

The FATF is a global standard-setting body that works to combat money laundering and terrorist financing. It was established in 1989 by the G7 countries and has since grown to include more than 200 countries and jurisdictions. The FATF is responsible for developing and promoting the adoption of policies, laws, and regulations that combat money laundering and terrorist financing.

The FATF works to ensure that its members comply with its standards and recommendations. It also works to strengthen the global legal framework and international cooperation to combat money laundering and terrorist financing. The FATF has developed a number of standards and recommendations that are designed to protect the integrity of the global financial system and prevent the misuse of financial services for criminal purposes.

In particular, the FATF has developed a number of recommendations that relate to virtual assets and virtual asset service providers. These recommendations include the “travel rule”, which requires financial institutions to obtain, hold, and transmit originator and beneficiary information relating to virtual assets transactions. The FATF also recommends that countries adopt measures to ensure that virtual asset service providers are subject to customer due diligence and record-keeping requirements.

The FATF is committed to ensuring that its members implement its standards and recommendations. To this end, the FATF has developed a roadmap to strengthen implementation of its standards on virtual assets and virtual asset service providers. The roadmap includes a stocktake of current levels of implementation across the global network, and in the first half of 2024, the FATF will report on steps FATF members and FSRB countries with materially important virtual asset activity have taken to regulate and supervise virtual asset service providers.

The FATF’s action plan to drive timely global implementation of its standards on crypto assets is a welcome development that will help to ensure that countries are taking the necessary steps to combat money laundering and terrorist financing. The FATF’s commitment to strengthening the global legal framework and international cooperation to combat money laundering and terrorist financing is an important step in protecting the integrity of the global financial system.

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