Crypto firms are still not fully adopting the “travel rule”, says FATF delegate

In 2019 the The Financial Action Task Force (FATF) urged jurisdictions around the world to adopt their virtual asset guidelines. At today’s V20 conference held online, David Lewis, Executive Secretary and Deputy G20 in the organization, provided an overview of how the implementation and business response has gone so far.

The FATF is an intergovernmental organization tasked with combating money laundering. The 2019 Cryptocurrency Regulation Guidelines, which include a controversial section called “Travel Rule,” andThey are designed to reduce the illegal use of virtual assets and align the sector with traditional banking regulations.

Lewis told conference attendees that Most jurisdictions have now transposed the guidelines into national law.

Crypto firms are still not fully adopting the “travel rule”, says FATF delegate
Crypto firms are still not fully adopting the “travel rule”, says FATF delegate

However, when it comes to cryptocurrency businesses officially known as “Virtual Asset Service Provider” or VASPLewis said his adaptation to the travel rule and the broader FATF framework was “relatively young”.

He acknowledged that advances have been made in the technical field as companies try to improvise new solutions to make their compliance efforts more efficient. But still, The travel rule “is not yet implemented globally or effectively in the private sector”he stressed.

The organization, according to Lewis’ report, You recognize emerging risks and intend to oversee the appropriate regulatory challenges you are facing. During the pandemic, crypto was increasingly used to move illegal funds. In addition, there is evidence that professional money laundering networks use cryptocurrencies more often.

While the total value of cryptocurrencies used for illegal activities remains low, It is used to launder money from drug and illegal weapons sales, child exploitation, human trafficking and evasion of sanctionssays Lewis. The organization appears particularly concerned about the various mechanisms and tools used to enhance privacy, including decentralized exchanges, so-called privacy tokens, “cups” and blenders.

Lewis also reiterated the FATF’s suspicions of being so-called “jurisdiction jumpers” or companies that move the organization believes that this could leave room for regulatory arbitrage.

Such properties and phenomena form the backbone of the FATF “red flags” list. that it offers companies to help them monitor user activity on their platforms or services.

Lewis said the FATF plans to publish a second implementation review of its guidelines. Released worldwide in June 2021, following its first review in June this year.

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