FATF reproves itself for lack of effective regulation over Bitcoin

The Financial Action Task Force (FATF) determined during its plenary session that only 45% of the 128 countries under its supervision are applying the standardized rules on virtual assets and service providers of bitcoin and other cryptocurrencies.

The annual review of its management, published in a report, notes that ” the lack of effective regulation makes it difficult for the competent authorities to follow the trail of transactions [de criptomonedas]which is leaving room for criminals to move the pieces in their favor.”

In its document the agency details that, so far, only 52 countries have complete oversight over cryptocurrency providers operating in their territories, but the figure reaches 58 if you include the 6 that have banned cryptoassets.

The figure shows that the progress is virtually nil compared to those handled a year ago, when CriptoNoticias reported that 54 of the FATF member countries applied cryptocurrency regulations. It means that in a year the agency has not been able to increase the implementation of its regulations against money laundering and terrorist financing, among digital asset or cryptocurrency service providers

The FATf has normally implemented its regulatory guidance on traditional financial instruments, but in the last 2 years it has focused on auditing cryptocurrency exchanges and other industry services. However, so far, it has not been able to demonstrate that its regulations to an ecosystem that is based on user privacy.

The global anti-money laundering and terrorist financing group it hopes that most of its member countries will be able to implement the regulations looking to track transactions with cryptocurrencies.

Among its guidelines, the FATF recommends complying with the so-called travel rule, a regulation that exchanges must adopt to exchange information on those users who carry out operations that exceed USD 1,000.

information FATF platform
User data must be shared by service operators as set out in the FATF travel rule. Source: Gerd Altmann / pixabay. com

The agency’s goal is for service providers in the cryptocurrency sector to know, at all times, where the transactions are coming from and where they are going.

Users want privacy, but FATF recommends vigilance over Bitcoin

In the same vein, the intergovernmental body calls on countries to ensure that virtual asset service providers based in their territory obtain and maintain the required information from each user operating on their platforms.

The global financial regulator also makes it clear in its report that it has observed that the continued use of what it calls “anonymity tactics applied to the cryptocurrency and related transaction industry is increasing.” In addition, he adds that since the world lives in confinement to protect itself from covid-19 the use of bitcoin and other cryptocurrencies has skyrocketed. In the face of this, FATF researchers believe that regulatory jurisdictions should better understand the situation, rather than focus on “mass adoption.”

So, ultimately, the FATF expects jurisdictions to implement the regulatory guidance on cryptocurrency service providers with the idea of being able to sanction those who fail to comply.

As reported by this media the FATF also during its plenary session took the decision to postpone its new regulation on Bitcoin, DeFi and services.

Many of the changes that the body was considering since April last year ” are problematic for innovation because they violate the privacy of Bitcoin users,” as Peter Van Valkenburgh, director of Research at Coin Center, an organization that advocates for users ‘ rights to open blockchain networks, pointed out.

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