Last year, the International Financial Action Task Force (FATF) urged global jurisdictions to adopt their anti-money laundering guidelines for cryptocurrencies. Because the apparent deadline is only a few weeks, some regulatory experts believe that the deadline isn’t, while actual adoption is a matter of years.
On May 12, global legal and regulatory experts and crypto industry executives met in a panel at Consensus: Distributed to discuss the FATF guidelines for cryptocurrencies.
The June 2020 travel rule deadline “is a myth”
At the virtual event, Siân Jones, organizer of the InterVASP Messaging Standards Joint Working Group (JWG) and senior partner at XReg Consulting, said the deadline for the guidelines in June 2020 was “a myth”.
The FATF guidelines, also known as the “travel rule”, contain a number of measures to combat money laundering and to make your customers aware of them to prevent cryptocurrencies from being used for money laundering. The FATF introduced the travel rule in June 2019 and said the agency will review and write the adoption of the guidelines in June 2020:
“The FATF will monitor the implementation of the new requirements by countries and service providers and will conduct a twelve-month review in June 2020.”
The request quickly became a “June 2020 deadline” in the crypto community. Jones, who said that she was previously involved in FATF policy groups, found that actually adopting the travel rule will cause a number of problems, and said:
“The deadline, which is sometimes raised, is a myth at one level. This requirement came into play in 2019 […] However, there will undoubtedly be some growing problems as countries implement a wider range of FATF requirements and apply the travel rule to VASPs. “
It may take years for 200 nations to fully adapt the FATF requirements
According to Jones, adopting the guidelines from one VASP in one jurisdiction to another is challenging because of the different regulatory standards. “You have a VASP in one country that must meet the requirements, but a VASP in another country that meets the requirements does not have to meet, “said the expert.
Given the complexity of implementing the FATF travel rules, Jones continued, “It may take a few years for the world’s 200 nations to fully implement the FATF recommendations.” However, Jones expects the countries that follow in his footsteps to surge rapidly over the next six to twelve months. The executive also noted that some countries, such as the United States, Switzerland and Japan, have made some progress in adopting the travel rule.
The JWG published a new standard for the exchange of cryptographic data last week
The message comes after the IntervASP JWG will publish officially a new technical standard to facilitate data exchange between VASPs on May 7th. The new standard known as “IVMS101” represents a data model that enables a universal common language for the communication of the necessary information about originators and beneficiaries between VASPs.
The JWG was founded in December 2019 by three major authorities, including the Digital Chamber of Commerce, Global Digital Finance and the International Association for the Exchange of Digital Assets. The IVMS101 data model must now be ratified by these three authorities.