- FATF will soon be able to regulate and issue licenses to cryptocurrency exchange companies.
- Proper regulations prevent prohibition of digital currencies in jurisdictions around the globe.
The Financial Action Task Force (FATF) is reported to have released the regulatory requirements for jurisdictions around the world. The FATF reckoned that they will soon be able to issue cryptocurrency exchange licenses as well as regulate them.
Twitter message on Friday 19 by the task force, stated that “FATF amends its global Standards to address the regulation of virtual assets and prevent their misuse for #moneylaundering and #terroristfinancing.”
The organization said that the cryptocurrency space is in need of regulations that will help to fight against money laundering practices. The official statement reads:
“Virtual assets and related financial services have the potential to spur financial innovation and efficiency and improve financial inclusion, but they also create new opportunities for criminals and terrorists to launder their proceeds or finance their illicit activities.”
The report released on Friday said that various wallet providers as well as ICOs will be required to abide by the updated requirements. The FATF has also redefined virtual assets accompanied by a set of rules and recommendations. The statement said in continuation:
The FATF has therefore been actively monitoring risks in this area, and issued guidance on a risk-based approach to virtual currencies in 2015. There is an urgent need for all countries to take coordinated action to prevent the use of virtual assets for crime and terrorism.”
While the task force has clearly distinguished fiat currencies from digital assets, the new set of rules will take into account the existing anti-money-laundering (AML). There is freedom for jurisdictions to prohibit virtual currencies in instance where they feel exposed greatly to money laundering risks. However, the organization hopes that prohibition will not be an option if regulation is handled in the right way.
The president of FATF, Marshall Billingslea stated in a recent interview with Reuters that the body will “issue additional instructions on the standards and how we expect them to be enforced” come June.
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