The Financial Action Task Force (FATF) heralded plans to propose effective rules regulating digital currency with its world AML/CFT standards. This effort is aimed at exterminating the use of cryptocurrencies for financing terrorism activities and money laundering.
The world watchdog made this proclamation at its plenary session this year, according to the report from Reuters. The rules set will work on Initial Coin Offerings (ICOs), digital currency exchange operators and offerers of encrypted wallets operational in individual jurisdictions.
FATF Recommendations & the Crypto Industry
An official publication on the FATF's website offers more data about the plan of the Task Force. The FATF has modified its standards to cater for cryptocurrency operations. This is in reaction to the surging use of digital currency as an instrument for money laundering and terrorist financing.
Via a more systematic exercise, the Task Force will officially issue these key amendments and explain how they work on (apply to) cryptocurrencies. The organization will provide proper guidance in its jurisdictions for the surveillance and oversight of digital currency sector operators.
Purportedly, the FATF will officially issue these new rules in summer next year.
Marshall further noted that the body would intermittently review the implementation of these key rules. Sinning member nations could experience circumscribed access to the world financial system.
The FATF, however, noted that nations are at freedom to choose under which AML/CFT type of regulated operations to categorise cryptocurrency providers.
This effort by the FATF is in reaction to different calls from major private institutions and governments for lucidity and transparency about how its standards work to the digital currency sector. In March 2018, ETH World News stated on the G20's moves to enact a standardized framework to abrogate the use of crypto in illegal financial operations.
Some nations are in the exercise of forming a legal framework to oversee and regulate the operations of digital currency operators. Malta lately issued laws to supervise ICOs and digital currency providers. The Japanese government tightly regulates digital currency activities in the nation. In 2017, the nation's major financial regulator mandated all digital currency operator must legally register with the government. This is chiefly to check and control money laundering operations.
The FATF's decision to navigate through the digital currency space is a major step in getting a standardized, organized regulatory framework for the sector. This might lift confidence in the sector and see nations such as China revoke their blanket prohibition on cryptocurrencies.