The Financial Action Task Force (FATF) reported that 11 out of 98 responding jurisdictions have began imposing its requirements on Combating the Financing of Terrorism, or CFT, and Anti-Money Laundering, or AML.

In an replace launched Thursday on the “Implementation of the FATF Standards on Virtual Assets and Virtual Asset Service Providers,” the FATF reported the “vast majority” of jurisdictions assessed by the group’s Global Network since June 2021 “still require major or moderate improvement” in AML/CFT compliance in accordance with the travel rule. According to the FATF, countries transferring in direction of implementing these necessities made “limited progress” during the last yr, with 29 out of 98 responding jurisdictions reporting passing legislation associated to the travel rule, and 11 beginning enforcement.

“While around a quarter of responding jurisdictions are now in the process of passing the relevant legislation, around one-third (36 out of 98) have not yet started introducing the Travel Rule,” mentioned the FATF. “This gap leaves VAs and VASPs vulnerable to misuse, and demonstrates the urgent need for jurisdictions to accelerate implementation and enforcement.”

A brand new FATF report on digital belongings finds solely 29 out of 98 jurisdictions have handed the FATF ‘travel rule’ to guarantee crypto corporations confirm who their prospects are. FATF members ought to lead by instance & introduce related legislation ASAP.

See the report➡️

— FATF (@FATFNews) June 30, 2022

The group added that corporations within the personal sector had made progress in introducing options to help compliance with the travel rule and “taking early steps to ensure interoperability with other solutions.” However, the FATF hinted on the necessity of implementing these options rapidly, given the “significant threat of ransomware actors misusing VAs to facilitate payments” and funneling illicit funds by way of Virtual Asset Service Providers, also referred to as VASPs.

“Countries that have not introduced Travel Rule legislation should do so as soon as possible, and FATF jurisdictions should lead by example by promoting implementation, and by sharing experiences and good practices […] Rapid implementation by jurisdictions will incentivize progress further.”

Related: President of Panama shoots down crypto invoice citing FATF tips

Among different developments since 2021 included an increase within the development of decentralized finance, or DeFi, and nonfungible tasks, which the FATF labeled as a “challenging area for implementation” of the travel rule. The group cited a Chainalysis report launched in February that “suggests that threats from criminal misuse continue” with illicit transactions in DeFi, and reached comparable conclusions for NFTs doubtlessly getting used for “money laundering and wash trading.”

Under FATF tips, VASPs working inside sure jurisdictions want to be licensed or registered. The group reported in an April replace that roughly half of assessed jurisdictions in 120 countries had “adequate laws and regulatory structures in place” to assess dangers and confirm useful house owners of corporations, urging them to prioritize figuring out and reporting info on cryptocurrency transactions.


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