Financial Action Task Force to Issue its Crypto Guidelines by Mid-2019
The Financial Action Task Force(FATF), a 37-nation group set up by the G7 industrial powers, is planning to formulate its first set of governing rules and guidelines that govern cryptocurrency industry by June 2019, the global watchdog said on Friday.
Paris-based FATF look for crypto exchanges, among other things, to be licensed, verify customers’ identities, prevent money laundering and for suspicious trading to be reported. It has also boldly unveiled plans to set guidelines for the legalization of initial coin offerings (ICOs).
Join the Leading Industry Event!
The move would be an upgrade from guidelines currently in place, which were first adopted by the FATF in June 2015. It was originally spurred by a call in June from the G20 leaders for global regulators to monitor cryptocurrencies.
The current standards, however, are non-binding in nature. Still, it pushes back the prospect of setting global rules on the matter, something that some regulators say is needed to tackle a phenomenon that transcends borders. In addition, it leaves the responsibility on local regulators to act, which gives the opportunity for crypto industry players to game the rules by moving their operations to friendlier jurisdictions.
Though few details have emerged about potential actions, certain basic measures are clear or highly expected. This begins with setting up KYC requirements, anti-money laundering and fraud prevention rules, and possibly sanctions screening controls.
FATF’s chief Marshall Billingslea also notes that countries whose compliance programs fail to meet expectations will face the risk of costly actions. Specifically, these countries could be added to “an FATF blacklist that restricts access to the global financial system.”
FuturoCoin – Stable Project For Upcoming MonthsGo to article >>
“By June, we will issue additional instructions on the standards and how we expect them to be enforced,” he added.
Rules Vary, but All Regulators Are Cracking Down
As it stands, the current shifting regulatory landscape for cryptocurrencies across the globe is still very confusing as local regulators are struggling to keep pace with the innovations in the space.
Although it is hard to generalize the attitude towards cryptocurrency, but some major hubs – such as Japan and South Korea – were the first countries to legitimize registration system for cryptocurrency exchanges.
Regulation of cryptocurrencies in some regions, however, is still in its early stages, including in the U.S. where lawmakers have not passed any laws addressing it directly.
Meanwhile, the European watchdog warned last year that investors might be unaware of the high risks that they are taking when investing in what has been a red-hot investing scene of late. However, the ESMA is largely limiting itself to taking enforcement actions against ICO operators at present, though the agency’s head said it might step up its regulation of the space more broadly in the nearest future.
With new regulations, a more defined structure, and well-defined demands from clients, the cryptocurrency and ICO industry will be a primary area of focus at the 2018 London Summit.