T. Raja Kumar of Singapore is the current president of the FATF, and yesterday he issued a call to the G7 to end the “lawless crypto space.”
The Financial Action Task Force is a global group that aims to halt money laundering, terrorist financing and other nefarious activities in the financial services sector. While not holding and legal authority, the group can pressure its 39 members to adhere to guidelines seeking to hinder crime.
Several years back, FATF issued guidelines on crypto regulation championed by the US, and many countries have been slow to adopt these rules. The guidelines include the “Travel Rule” that requires crypto transactions to record buyers and sellers – including identifying information.
Kumar reports that 73% of countries have ignored the guidelines or only partially adhere to the request. Kumar calls the situation “unacceptable.”
“The risks posed by crypto assets continue to grow. The recently published FATF report on ransomware financing highlighted that ransomware payments have increased significantly in recent years, almost exclusively using crypto assets. Crypto assets are also used to evade sanctions, and by terrorist groups to raise and move funds. While the risks have increased, crypto assets continue to operate in a virtually lawless global environment,” said Kumar.
Kumar said that countries need to “take urgent action” challenging rogue states and criminals that use crypto.
While Kumar is NOT calling for the cessation of all digital asset activity, and Singapore is far more crypto-friendly than some other nations, the need to incorporate a compliant regulatory regime is something that will be good for digital assets as it will instil greater confidence by the masses.
Kuma is president of FATF from 1 July 2022 to 30 June 2024 when he will be succeeded by Dr. Marcus Pleyer of Germany.