Category Archives: Financial Action Task Force

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35 Countries Advised to Review, Implement Banking-Like Regulations for Crypto


The FATF (Financial Action Task Force) in a recent assembly in France has called for tightening supervision over cryptocurrency exchanges in a way similar to commercial banks. The body advised all its 35 member countries to supervise the exchanges to prevent cryptocurrencies from being misused for unlawful transactions.

The new FATF guidelines are aimed at ensuring regulation and supervision of cryptocurrency service providers. The body has urged all its members to regulate cryptocurrency exchanges and associated transactions in the same way they regulate commercial banking institutions. The inter-governmental organization has made it obligatory for its member nations to adopt these changes, finalizing the necessary implementations for the supervision and regulation of virtual currency providers. These measures can be officially and formally adopted as a part of the FATF requisites from June.

To make effective use of the suggestions made by the FATF, member nations have to contemplate virtual assets and digital currency as “property”, “proceeds, “funds”, or other different “corresponding value”.

In addition, members will have to adopt relevant measures against virtual assets and their providers. They must now require virtual asset providers to realize and assess the potential terror financing and money laundering risks, and take effective actions to mitigate the same.

The FATF has established standards to promote effective implementation of the legal, regulatory and functioning measures for standing against money laundering, terrorist funding and other threats imposed on the integrity of the international finance system.

However, the taskforce has clarified that member nations need not establish a separate licensing or registration system for a person or persons who are already licensed and registered in this manner as financial institutions. These financial institutions already have obligations apart from the new suggestions, and hence they are permitted to accept crypto assets providers.


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Japan to Regulate Crypto Wallet Services

Japan’s Financial Services Agency (FSA) is planning to impose regulations on cryptocurrency wallet service providers, according to a published account of its latest meeting.

The agency gathered earlier this week for its ninth cryptocurrency study group meeting. The FSA also hosts regular study group meetings to discuss various crypto regulatory issues, particularly those concerning the regulation of cryptocurrency exchanges.

A major topic of its last meeting was a plan to regulate wallet service providers, given that currently, FSA regulations are not applicable to such services as such providers are not in the business of actually trading. The agency now feels that because such providers manage transfers and storage of digital currencies, they should be brought in line with financial regulation.

It was revealed that any new regulations would not apply to wallet software developers and hardware wallet manufacturers as these are often simply coded private facilities with no company backing.

The focus is again on money laundering and as such, Financial Action Task Force (FATF) regulations will become the basis for the new regulations according to the FSA. The FATF is an intergovernmental organization that designs and promotes policies and standards to combat financial crime. Recommendations created by the task force target money laundering, terrorist financing, and other threats to the global financial system.

Other issues discussed in this ninth meeting of the cryptocurrency study group around the topic of wallet services touched on stolen funds during cyber-attacks, wallet failures, money laundering, and other risks shared by crypto exchanges.

The FSA is continually updating its cryptocurrency regulations. At this last meeting, further measures to regulate the industry were discussed, such as financial audits and the separate management of funds belonging to service providers and customers. Also, it was suggested that during a transition period for introducing new wallet regulations service providers would not be able to add new businesses, customers, or coins supported by the wallet.


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Crypto Faces Global AML Regulations by June 2019, Says Watchdog

The international watchdog focused on anti-money laundering (AML) regulations has said it plans to institute a global framework for cryptocurrency beginning in June next year.

As Reuters reports, the Paris-based Financial Action Task Force (FATF) has taken a significant step forward in the process of regulating the famously unregulated market of digital currencies with its announcement this week.

FATF detailed plans to begin publishing rules that would set a standard for all cryptocurrency transactions, noting that global jurisdictions would be required to enforce certain licensing schemes or compliance checks on exchanges, financial service providers for initial coin offerings (ICO), and potentially digital currency wallet providers.

Marshall Billingslea, FATF’s president, was responsible for setting the early summer date for action next year following discussions this week between officials from 204 global jurisdictions.

The upcoming regulations come with a warning: any non-compliant countries will be put on FATF’s blacklist, meaning they will suffer from restricted access to the global financial system.

A statement released by the watchdog on Friday reads: “there is an urgent need for all countries to take coordinated action to prevent the use of virtual assets for crime and terrorism.”

A lack of global cooperation on cryptocurrency regulations until now has led to entirely different approaches being adopted by national governments, bringing uncertainty to crypto firms looking to expand their operations.

Countries have failed to agree on how best to manage the price volatility of the cryptocurrency market, and have been skeptical of wallets’ and exchanges’ inability to protect peoples’ investments on their platforms from hacks and ensuing theft.

During the G20 Summit earlier this year, leaders expressed a desire to expand existing international AML onto the cryptocurrency industry.

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Abu Dhabi Regulator Wants Internationally Standardized Crypto Regulation

Abu Dhabi’s head financial regulator has called for internationally standardized regulations for cryptocurrencies in order to prevent both criminal activities and their negative impacts on the image of virtual currencies.

Richard Teng, head of the Financial Services Regulatory Authority of the Abu Dhabi Global Market (ADGM) spoke at the country’s fintech event this week where he detailed the necessity for increased regulation of the space.

“This space needs to be properly regulated, otherwise there is the risk of financial crime… Every time a coin gets stolen or lost, it affects the confidence in this asset class,” Teng shared with the audience.

He continued, saying that he has full confidence in the country’s own ”comprehensive regime.” By sharing Abu Dhabi’s experience with global regulators including the US Securities and Exchange Commission, he hopes to bring a stronger trust in cryptocurrency to investors and governments alike.

International AML Laws Coming

Teng’s sentiment is popular among international regulatory leaders. On Wednesday, the Financial Action Task Force (FATF) announced that they are a step closer to establishing global anti-money laundering (AML) policies for cryptocurrencies, with a FATF plenary scheduled in October.

During this discussion period, the task force consisting of 35 member jurisdictions and 2 regional organizations hope to agree upon what existing standards need to be adjusted in relation to cryptocurrencies, and what action the states need to take to uphold this.

The agency’s president Marshall Billingslea echoed Teng’s opinions in saying that the standards need to be applied in an internationally standardized way. Billingslea described the current AML policies as ”very much a patchwork quilt or spotty process” which leaves major vulnerabilities in financial systems on an international and state scale.

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