The Financial Action Task Force (FATF) believes that more than half of jurisdictions do not comply with AML in relation to crypto companies.
The group has posted a FATF State of Performance and Compliance report stating that nearly half of the countries still do not require cryptocurrency service providers to properly identify customers under anti-money laundering and terrorist financing (AML) regulations.
The FATF has promised to strengthen monitoring of member countries, including the US, China and the European Union, as the risks of illegal financing are the highest here. The authors of the report claim that 9% of jurisdictions do not comply with regulations requiring virtual asset service providers (VASPs), such as wallet and exchange operators, to guarantee that cryptocurrencies are not used for money laundering or terrorist financing.
The document says that only 37% of jurisdictions partially comply with the FATF requirements. The authors of the report emphasize that non-compliance with the rules puts the cryptocurrency sector of the economy at the bottom of the rating table, on a par with risky non-financial enterprises such as law, accounting and real estate.
International anti-money laundering regulations were updated in 2018. The legislation included rules for regulating digital assets. Regulators felt that the lack of regulation of cryptocurrencies could create a loophole in laws regarding sanctions and other financial restrictions. Crypto business, in turn, sees a threat to the industry in the new FATF rules.
