The Group of Twenty (G20) has backed a new proposal that would see crypto exchanges give over their users’ data to individual regulators in their jurisdictions. Their declaration serves as them “reaffirming our commitment” to implement accepted global standards to virtual assets.
The group said:
“Technological innovations can deliver significant benefits to the financial system and the broader economy. While crypto-assets do not pose a threat to global financial stability at this point, we are closely monitoring developments and remain vigilant to existing and emerging risks.”
Leaders from several countries in Europe, the US, China, Japan and South Korea had made this announcement at the G20 Summit in Osaka, following a set of proposed guidelines published by the Financial Action Task Force (FATF) that aims to tackle money laundering concerns. These concerns derive from the possibility to wash crypto funds at exchanges, and the further ability of anonymization from other blockchain technologies and wallets. The FATF has just a week ago established an enforced time restriction on exchanges’ customer information,
The regulatory bodies that would receive customer data, under the new proposal, will be adopting a “risk-based approach” in solving these issues of crypto-based mixing and laundering, and will oversee those services handling crypto. These services that include exchanges will be known as virtual asset service providers (VASPs).
These bodies would have new powers, able to obtain, hold, and when necessary, transmit information concerning account holders, particularly if transactions are of a suspicious nature. Exactly what constitutes for suspicious behavior, of course, is sometimes open to interpretation although the guidelines do provide some metrics.
More importantly, the user data that is permissibly gathered includes the names of the transaction parties, wallet and physical addresses, beneficiary account numbers, national identity numbers and dates of birth.
With this formal backing, FATF guidelines are now expected to become common law across the world.
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