FATF approves a plan for implementing crypto standards

The “Travel Rule” of the FATF contains suggestions that financial institutions gather information on the originators and recipients of certain crypto transactions.

It has been announced by the Financial Action Task Force (FATF) that its delegates have agreed on an action plan “to encourage rapid worldwide adoption” of global rules on cryptocurrencies.

FATF said on February 24 that it’s plenary, made up of representatives from over 200 countries, had gathered in Paris to discuss how to better “apply FATF Guidelines on virtual assets and virtual asset service providers.” In 2024, the task force will report on the progress made by FATF members in implementing crypto standards, including regulation and monitoring of VASPs.

According to the paper, the absence of regulation of virtual assets in many nations presents chances for criminals and terrorist financiers. To quote the FATF: “After the FATF updated its Recommendation 15 in October 2018 to cover virtual assets and virtual asset service providers, several countries have failed to implement these new requirements, notably the ‘journey rule’ which involves acquiring, keeping, and communicating originator and beneficiary information linked to virtual assets transactions.”

The FATF has recommended in its “Travel Rule” that VASPs, financial institutions, and regulated businesses in member states collect data on the senders and receivers of certain digital currency transactions. The financial watchdog announced in April 2022 that several nations were not in conformity with its Combating the Funding of Terrorism and Anti-Money Laundering requirements.

Several nations have been slow to adopt policies that conform to the Travel Rule, although Japan, South Korea, and Singapore have been notable exceptions. According to reports, Iran and North Korea are among the countries put on the FATF’s “grey list” for monitoring suspected financial activities.

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Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.

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