The Financial Action Task Force (FATF) is a Paris-based G20 group formed to eradicate money laundering. They have just announced their jurisdiction over cryptocurrency worldwide. And they’ll issue their first set of rules in June of 2019.
In a time when regulations are undefined, the G20 Group, FATF seeks to unify standards
Many nations where cryptocurrency is active have been bothered by its cases of fraud and other illegal activity. Japan was the first to take charge, passing law that require all exchanges to register with a government agency.
Other big crypto countries like China and India have taken a less favorable stance. India recently banned exchanges from doing business with banks, causing many firms to relocate. And in Venezuela, the government-backed Petro (PTR) is even legal tender, though possibly for government-backed laundering.
FATF President Marshall Billingslea says the watchdog group will audit periodically
If they come across any problems, they may blacklist the offending country and cut them off from the global market. Billingslea also serves as assistant secretary for terrorist financing at the U.S. Department of Treasury.
The announcement followed a summit, with representatives of 204 countries assembled. In the official press release, the group called for “vigilant” monitoring and said,
“There is an urgent need for all countries to take coordinated action to prevent the use of virtual assets for crime and terrorism”.
The threat of illegal activity is very real
It’s still hard to say for sure. Reputable sources can have wildly different figures. CipherTrade says that $266 million was laundered last year. By the end of 2018, that figure is likely to more than triple to $1.5 billion.
However, The Wall Street Journal says it’s more like $88 million. That’s still not great, but it’s considerably smaller.
And in Japan, where crypto is regulated, the National Police Agency reported under 700 cases of laundering in the first half of the year, compared to 347,000 cases of fiat.
During their assembly, the FATF explored whether their current regulations applied to crypto, and are currently researching its impact as they establish new rules. Besides their demands on governments, the FATF will require all exchanges, and wallet and ICO firms must be licensed through them. They’ll also have to verify customers’ identities.
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