FATF Presents New Guidelines For Crypto Trading

By Rishma Banerjee

The Financial Action Task Force (FATF), an intergovernmental organization devoted to combatting money laundering and terrorism financing has released a new set of guidelines regarding crypto trading among its 37 member countries.

These include a rule stating that “virtual asset service providers” (VASPs), including crypto exchanges, must pass information about their customers to one another when transferring funds between firms.

The required information for each transfer, according to the guidelines are:
(i) name of the customer or the originator.
(ii) account number of the originator where such an account is used to process the transaction (e.g., the VA wallet);
(iii) physical (geographical) address of the originator, or national identity number, or customer identification number (i.e., not a transaction number) for unique identification
(iv) name of the beneficiary, and
(v) account number of the beneficiary where such an account is used to process the transaction (e.g., the VA wallet).

FATF has given the countries 12 months to adopt these guidelines, stressing on the urgency of crypto security.
The guidelines also suggest that individuals using crypto wallets to transmit value could be designated VASPs, and thus subject to licensing requirements.

As far as enforcement is concerned, FATF recommends using open-source information and web-scraping tools to identify unregistered or unlicensed operations advertising their services. VASPs should also be able to freeze or prohibit transactions with sanctioned individuals, FATF said.

The new guidelines are being feared to be more detrimental than beneficial and transparent. Although, the U.S Treasury is hopeful. Secretary Steven Mnuchlin 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,”

Whether these regulations will be for better or for the worse, only time can tell.