News emanating from the Financial Action Task Force (FATF) reveals that it will update and publish its laws concerning virtual asset providers (VASP) and cryptocurrency providers. Virtual asset providers include custody platforms, wallet providers, exchanges, and others providing similar services.
After consulting with key stakeholders, the updated document will be made available to the public members through them. In a briefing made available to the public yesterday, the team members unanimously agreed at the firm’s three-day plenary session to update its policies on VASPs.
When Will the New Policies Be Published?
This intergovernmental firm revealed that it wouldn’t exceed early next month before it publishes its reviewed policies. This recent update will be another update to the previously-released document when this organization that fights terrorist financing and money laundering inaugurated a new travel rule compliance for VASPs.
This 2019 update made it compulsory for all VASPs to disclose the trade information of senders and recipients that use their platform. The firm review this June 2019 travel document precisely one year later, and in the review, the FATF observed that they’ve made satisfactory improvement in carrying out the crypto travel rule.
The body earlier released an update to the FATF travel rule three months before the mid-2020 update and remarked that most VASPs based in the USA are complying with the directive. Indeed, inside sources reveal that the FATF travel rule is being executed mostly by Asian countries, especially South Korea and Singapore, the two countries with the highest degree of observance by their exchanges.
The stocks of some countries, especially Pakistan, one country on the FATF watch list, have started reacting in anticipation of this news. The soon-to-be-released FATF laws for VASPs and cryptocurrencies will also include policies that govern crypto peer-to-peer transactions and stable coins.
Some of the body’s report revealed that it would consider responses from the public discussion before releasing its final update about VASPs and cryptos, which is expected to be approved by the middle of this year.
Despite a decline in illicit cryptocurrency transactions, the FATF still feels that it is crucial to perform risk-based supervision of VASPs and cryptos concerning fighting terrorist financing and money laundering activities.
A blockchain monitoring organization, Chainalysis, disclosed in its 2020 crypto crime assessment that only 0.34% of all cryptocurrency transactions for the whole year were crime-related. It is important to note that there has been a significant decrease in the size and actual dollar value of all crypto crimes in the last two years.
Why and When Was The FATF Established?
The G7 summit, which took place in Paris in 1989, gave the go-ahead to establish the FATF amidst growing worries over money laundering and the threat it poses to the finance industry, especially banks. Members of the task force were drawn from 37 member jurisdictions and two regional organizations, namely the gulf cooperation council and the European Commission.
The FATF is responsible for fighting threats to the international financial system, terrorist financing, and money laundering by making recommendations. These recommendations are adopted and implemented all over the world.