Financial Action Task Force (FATF) made an announcement today focussed on digital currency’s role in money laundering and the subsequent need for heightened regulation. Secretary Steven Mnuchin notes in his closing remarks.
An intergovernmental organization that focuses its efforts on fighting money laundering, the FATF plans to strengthen control over cryptocurrency exchanges in order to stop digital currencies from being employed for money laundering and related crimes.
Steven Mnuchin, the U.S. Secretary of the stated in the remark that the new measure will necessitate crypto assets provider to comply with anti-money laundering (AML) and combating the financing of terrorism (CFT) similar to how traditional institutions do.The final guidance pamphlet from the organization elaborated over such subjects.
The organization especially wants cryptocurrency operators to establish features such as identity behind crypto funds senders and recipients, conduct due diligence in order to ensure they are not engaging in illicit activity and to develop risk-based programs. Mnuchin said:
“By adopting the standards and guidelines agreed to this week, the FATF will make sure that virtual asset service providers do not operate in the dark shadows. This will enable the emerging FinTech sector to stay one-step ahead of rogue regimes and sympathizers of illicit causes searching for avenues to raise and transfer funds without detection.”
The head of financial intelligence at Europol, a European Union law enforcement agency, Simon Riondet stated in an interview with Reuters that there has been an increase in money laundering with cryptocurrencies. Riondet added:
“We also have some investigation on the dark web in which the payments are made in cryptocurrencies, sometimes in bitcoin [BTC], and they are switching it to more anonymised cryptocurrencies.”
Other industry participants also have voiced concerns that blockchain technology would have to be fundamentally restructured or cryptocurrency exchanges had to develop a complex parallel system in order to satisfy new reporting requirements. On the other hand, others are concerned about how the increased compliance costs will affect the ecosystem that is supposed to be decentralized.
Read more:Ethereum Classic’s Next Crypto Code Upgrade Set for September
Image source – Pixabay.com
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