FATF Report Finds Only 29 Jurisdictions Passed FATF Standards For Virtual Assets and Crypto Service Providers

Update on FATF standards for virtual assets and service providers.

A new FATF report on virtual assets finds only 29 out of 98 jurisdictions have passed the FATF ‘travel rule’ to ensure crypto firms verify who their customers are. FATF members should lead by example & introduce relevant legislation ASAP.

See the report➡️https://t.co/PWbaOMtNfJ pic.twitter.com/hHpALXiIJv

— FATF (@FATFNews) June 30, 2022

A recent analysis by the Financial Action Task Force (FATF) on virtual assets reveals that only 29 of 98 countries have met the requirements of the FATF’s “travel rule” to guarantee that cryptocurrency businesses verify the identities of their consumers. Authorities need to move more quickly to verify the identities of crypto users. 

FATF’s anti-money laundering and counter-terrorism financing (AML/CFT) Standards have been extended to financial activities involving virtual assets and virtual asset service providers for the past three years in order to respond to the threat of criminal and terrorist misuse of these virtual assets. To enable countries and virtual asset providers properly execute the FATF Standards on virtual assets, FATF has released two worldwide evaluations of their implementation since then.

The study presents a third focused analysis of implementation, with a particular emphasis on the FATF’s Travel Rule. This rule mandates that the private sector gather and transmit recipient and originator information in conjunction with virtual asset transactions.

In addition to this, it offers a concise update on the general implementation of FATF’s Recommendation 15 and its Interpretative Note (R.15/INR.15), as well as newly emerging risks and market developments that FATF continues to monitor. According to the report, some examples of these include decentralized finance (DeFi), non-fungible tokens (NFTs), and unhosted wallets.

In related news, the Financial Action Task Force (FATF) said in its plans for 2018 that crypto service providers are required to verify the identities of their consumers. These suggestions were updated in 2019. 

However, many people in the sector have protested that it breaches privacy and is poorly intended for payments that are taking place on a public blockchain. The identification checks are expected to enable authorities to follow criminal transactions, just as they do in the traditional banking system.