Money laundering watchdog pushes for rules on crypto information sharing

A survey commissioned by the Financial Action Task Force (FATF) has revealed that only 30% of jurisdictions have passed rules to help prevent the illicit use of cryptocurrencies. 

Uptake is incredibly slow

Their survey has revealed that most countries lack ‘travel rule’ laws that could help prevent the illicit use of cryptocurrencies by criminals and terrorists. These rules require companies and service providers to share information about senders and recipients in cryptocurrency transactions. 

In a recent report, FATF stated that more countries need to understand the money laundering and terrorist financing risks within the crypto industry, and one way to mitigate such risks is to implement travel rules.

But, as of March 2022, only 29 out of the 98 jurisdictions that responded to FATF’s survey said they had passed relevant rules. Of these, only 11 said they’d started enforcement and supervision on those rules.

FATF says that ¼ of respondents are now in the process of passing these laws, and around 1/3rd haven’t started the process of introducing relevant laws.

How can FATF promote uptake?

For more jurisdictions to pass travel rules, FATF believes that the private sector must increase the ability to exchange information across jurisdictions.

To help facilitate uptake, FATF will continue to monitor emerging risks within the sector. These emerging risks include the use of crypto to evade sanctions and to launder illicit proceeds from ransomware attacks.

On top of this, FATF has also noted that member countries had expressed increasing concerns about decentralized finance and non-fungible tokens.

To help, FATF has said that it will help promote implementation of the travel rule requirement by facilitating discussions with member countries and monitoring market trends that might need additional work. FATF will also conduct another progress review in June 2023.

Ensure crypto compliance with Veriff

In the crypto space, regulations surrounding AML compliance are continually changing and evolving. Thankfully, with the help of our crypto verification, you can prevent fraud while also maintaining industry-leading conversion rates.

Our selfie-based identity verification platform ensures global compliance. With our help, you can satisfy FINRA, SEC, and GDPR requirements, as well as enforce AMLD6 guidelines.

To discover how we can help you while also ensuring your users can access their crypto without friction, talk to us today.