The Financial Action Task Force or FATF, the global AML/CFT group, has announced the outcomes of its most recent plenary. Included in the announcement are several items of note.
Filed under “improving implementation of FATF requirements for virtual assets and virtual asset service providers,” the group stated:
“As the report on disrupting the financial flows from ransomware demonstrates, the lack of regulation of virtual assets in many countries creates opportunities that criminals and terrorist financiers exploit. Since the FATF strengthened its Recommendation 15 in October 2018 to address virtual assets and virtual asset service providers, many countries have failed to implement these revised requirements, including the ‘travel rule’ which requires obtaining, holding and transmitting originator and beneficiary information relating to virtual assets transactions. The Plenary thus agreed on a roadmap to strengthen implementation of FATF Standards on virtual assets and virtual asset service providers, which will include a stocktake of current levels of implementation across the global network. In the first half of 2024, the FATF will report on steps FATF members and FSRB countries with materially important virtual asset activity have taken to regulate and supervise virtual asset service providers.”
The travel rule requests that virtual asset service providers (VASPs) maintain records on just about every digital asset transaction, including names addresses, etc., of the individuals or entities engaged in the transaction. The Travel Rule has been an established request for some time now, but apparently, many jurisdictions have not adhered to the request of the global entity.
Several other issues are included in the update, including the challenges of ransomware and money laundering in alternative assets like art.
The inter-governmental body seeks to establish international standards that prevent these illegal activities. As FATF has no jurisdiction, it is more about peer pressure and shaming scofflaws.
