Leaders from the 20 most powerful economies in the world may discuss creating a global regulatory framework for “crypto assets” at their forthcoming meeting in Osaka in June (G20 2019 Japan), and “Virtual Asset Service Providers” (VASPSs) are holding their own concurrent meeting (V20), “…to deliver a coordinated response to the updated standards proposed by the Financial Action Task Force (FATF).”
Promotors are calling the V20 meeting, “…a critical two-day summit,” that will be attended by, “…representation from leading digital asset exchanges as well as key domestic industry representative bodies and guest’s from the FATF.”
The FATF is an intergovernmental organization created in 1989 to combat, “…money-laundering and terrorist financing and other related threats to the integrity of the international financial system.”
- countries apply a risk-based approach to the trading of crypto-assets and apply “rules commensurate” with the risks
- VASPs be registered and licensed in the jurisdictions where they originated
- VASPs be subject to “adequate regulation” and monitored to ensure they are conducting proper KYC/AML (customer identification/anti-money laundering) procedures
- regulatory staff be empowered to impose discipline on non-compliant VASPs, including the withdrawal of licenses
- countries act, “…rapidly, constructively, and effectively provide the widest possible range of international cooperation in relation to money laundering, predicate offences, and terrorist financing relating to virtual assets.”
- countries, “…ensure that beneficiary VASPs obtain and hold required originator information and required and accurate beneficiary information on virtual asset transfers, and make it available on request to appropriate authorities.”
In response to the FATF directives, representatives from the Crypto Valley Association, headquartered in Zug, asked that the proposed rules be nuanced, and that, “The definition of Virtual Assets should not be broadened…The term VASPs and custodial services should be clearly defined…(and that the FATF) should allow alternative means of identity validation…” among other things.
The V20 meeting is being called to coalesce advocacy for affected industry groups.
“Without the unified support of Virtual Asset Service Providers (VASP’s), digital exchanges, government and industry associations, there will be no voice at the table,” organizers write.
“V20 Proposals” include, in the words of organizers:
- A round table summit of government agencies, crypto companies, and FATF representatives at the G20 Summit in Osaka
- Regulation proposed by the industry reflecting the unique nature of virtual assets to influence the FATF proposal.
- An extension of the timeline for the updated FATF standards to come into effect.
- Development of protocols and standards to underpin a platform to meet the information collection requirements of FATF.