FATF is concerned and anxious about countries’ sluggishness in regulating cryptocurrencies.
The FATF has examined a year’s worth of data to compile a list of countries, outlining their adoption of various regulations.
The Financial Action Task Force (FATF) has voiced concerns over the limited adoption of its regulatory rules for the virtual digital assets sector by many nations. According to a report from the FATF, the delay in implementing these crypto-related regulations is creating opportunities for criminal activities to flourish. The organization has analyzed data spanning 12 months to compile a list of countries and their respective adoption of these rules.
“In February 2023, the FATF Plenary endorsed a roadmap aimed at strengthening the implementation of FATF Standards concerning virtual assets and virtual asset service providers (VASPs). Numerous countries are yet to fully comply with the FATF’s requirements on virtual assets and VASPs to prevent their exploitation for illicit financial activities,” stated the organization in an official announcement.
The Paris-based global financial watchdog has been working to address issues related to the misuse of crypto assets by criminals for money laundering or terrorist financing. In November 2022, the FATF informally instructed countries to adhere to its anti-money laundering (AML) regulations to avoid being placed on the ‘grey list’.
In addition to other directives, the FATF has mandated that all countries permit only licensed entities to engage in transactions involving crypto assets. Furthermore, the FATF has instructed nations to gather information about both senders and recipients of crypto assets, particularly focusing on suspicious transactions. Within the compiled list, the FATF has indicated which nations have met or failed to meet specific criteria established by the FATF regarding crypto-related activities.
These criteria encompass conducting risk assessments, establishing licensing frameworks, and conducting supervisory examinations of Virtual Asset Service Providers (VASPs), among other requirements.
“The nature of virtual assets being inherently international and borderless implies that a lack of regulation for Virtual Asset Service Providers (VASPs) in one jurisdiction can lead to significant global repercussions. This is particularly alarming,” stated the organization. “The objective of this table is to facilitate the FATF network in urging jurisdictions with significant VASP activity to fully implement Recommendation 15 in a timely manner.”
India appears to have implemented all FATF rules as per the organization’s guidelines. Conversely, countries such as Australia, Finland, Greece, Malaysia, and Portugal are still in the process of implementing FATF regulations.
Ashish Singhal, Co-founder of India’s CoinSwitch crypto exchange, has responded to the concerns raised by FATF.
Singhal stated in a LinkedIn post, “We appreciate India’s proactive stance in conducting a risk assessment of Virtual Asset Service Providers (VASPs) and implementing the Travel Rule. India underwent a Mutual Evaluation last year, and a potential plenary discussion is scheduled for June this year.”
