The organization called for more active actions to avoid serious global consequences

FATF: By mid-2023, only 30% of countries have implemented crypto regulation

28.03.2024 - 12:55

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4 min

What’s new? Less than 30% of jurisdictions around the world have begun regulating the crypto sector as of June 2023, according to Raja Kumar, president of the International Financial Action Task Force (FATF). He said this low level of attention to the industry calls “to action.” The FATF recommendations are not binding, but jurisdictions that do not comply could face isolation due to a downgrade in a rating that reflects the transparency of the economy.

The FATF report

What else is known? The FATF approved a roadmap to strengthen the implementation of crypto regulatory standards last February. Twelve months later, the group analyzed progress in various countries, with blockchain analytics firms Chainalysis, Lukka Inc (formerly Coinfirm), and TRM Labs assisting with the report.

The new report notes that many countries have yet to fully implement the FATF requirements for virtual assets and related service providers to prevent their use for illicit finance. Failure to do so “creates significant loopholes for both criminals and terrorists to exploit,” the experts emphasized.

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For example, countries such as Argentina, Belgium, Brazil, Colombia, New Zealand, Turkey, New Zealand, and Vietnam have not yet started to implement registration or licensing procedures for crypto companies.

Also, Australia, Iceland, Russia, Ukraine, South Africa, and Vietnam have not yet begun to apply to crypto companies the Travel Rule, which obliges companies to exchange information about customers when making transfers to identify suspicious transactions.

The FATF emphasizes that virtual assets are inherently international and borderless, and failure to regulate them in one jurisdiction could have serious global implications. The report mentions North Korean hackers who are actively laundering stolen cryptocurrencies to finance the creation of weapons of mass destruction. It also notes that the creators of ransomware now almost always demand ransom payments exclusively in cryptocurrencies.

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Earlier, PwC reported that 42 countries tightened or started developing crypto regulations in 2023.

In February, the FATF downgraded Russia’s rating in terms of countering suspicious crypto transactions to “partial compliance with recommendations.” Rosfinmonitoring said that the reason was the lack of regulation of crypto exchanges and exchangers. Earlier, Turkey announced the tightening of AML regulations for crypto firms to improve the FATF rating.

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