Financial Action Task Force (FATF) pressures bitcoin exchanges to adopt travel rule


Key facts:
  • The Financial Action Task Force (FATF) ensures that only 29 jurisdictions accept the “travel rule”.

  • In a report warning of the risks of DEFIs, NFTs, and self-locking wallets.

In a new report, the Financial Action Task Force (FATF) has called on regulators and service providers using Bitcoin (BTC) to expedite the adoption of the so-called “travel rule”.

According to the agency’s estimates, there is “a continuing need for many countries to enhance understanding of the prevention of money laundering and terrorist financing (AML/CFT) risks in the Virtual Asset Service Provider (VASP) sector,” as noted by the Financial Action Task Force in the statement published on June 30.

The group considers that the document, Explain what they consider Related emerging risks faced by countries and the private sector using Bitcoin and other cryptocurrencies.

The FATF stressed the importance of knowing the “originator and beneficiary” of virtual asset transactions, as it “helps prevent criminal and terrorist abuse of cryptocurrency.”

Additionally, they added in the text Warnings about decentralized finance (DeFi), non-fungible tokens (NFT) and self-custodial wallets.

For the agency, the term “decentralization” More related to marketing That with the “technical description”, and that even behind the so-called “decentralized arrangements”, there are still often central individuals and objects that may be subject to AML/CFT obligations.

Too few did the “Travel Rule”

The FATF’s call is also due to the low inclusion of this regulation among cryptocurrency exchanges.

from 98 jurisdictions, Only 29 focused laws passed in the relevant travel rules. They explained that only a small subset of these jurisdictions are beginning to implement them.

According to the graph, 26 jurisdictions are still issuing relevant laws and 36 have not begun to introduce the travel rule. Source: fatf-gafi.org.

This was clarified last April, when CriptoNoticias reported that only 9% of member countries implement appropriate laws and regulatory structuresFor providers of virtual assets such as Bitcoin (BTC) and cryptocurrencies.

Information issued by the FATF itself indicated that 52% of the countries that were evaluated It has appropriate laws and organizational structures. “Many countries still face significant challenges in taking effective measures commensurate with the risks they face,” the agency said.

It should be noted that the “Travel Rule” is a regulation issued 3 years ago. The idea is that it will be approved by service providers with virtual assets, including exchanges. goal isSharing information with each otherFor users who perform transactions exceeding $1,000 USD.

It must be remembered that the FATF is an international organizationRecommendations are not bindingThat is, they do not make laws because this is the responsibility of each jurisdiction. However, failure to comply with its guidelines can result in private states or companiesTo merge a gray or black list.

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