The Financial Action Task Force will release its updated guidelines for crypto sector policing. It will also include peer-to-peer platforms (P2P), stablecoins (NFTs) and non-fungible tokens.
It also needs to be shown that countries are following the highly-criticized Travel Rule. This is a crucial anti-money laundering and counterterrorism financing measure.
Before a major overhaul to its 2019 crypto guidance, the FATF sought input from the sector. It emphasized what it calls Virtual Assets – tokens such as bitcoin and Virtual Asset Service Providers. This refers to crypto exchanges and wallet provider providers.
The FATF acknowledged previously that these guidelines were not complete. In an official statement, the FATF stated yesterday that its October plenary session had concluded that crypto was “fast-moving” and technologically dynamic. This means that continued monitoring and engagement between public and private sectors are necessary.
According to the body, its new guidance will be published October 28th. It clarifies the definitions of virtual assets and VASP. The FATF report to G20 was used to clarify how the FATF standards are applicable to stablecoins.
FATF spoke out about the need to “address peer-to-peer transaction risks” and promised to provide tools for identifying and mitigating these risks.
NFTs and DeFi are likely to be under scrutiny, but it is possible that firm regulations will still be some time off. The body stated that it would “be vigilante and closely monitor virtual assets and VASP sectors for any material changes that necessitate further revising or clarifying the FATF standards”, particularly with regard to NFT, DeFi policing and P2P.
However, some G20 regulators expect clearer guidance on DeFi and NFT. Kim Jeong-gak, head of the South Korean Financial Intelligence Unit (FIU), stated earlier this month that the nation was watching for future FATF recommendations about NFTs or DeFi and that it would be seeking to take appropriate action.
The Exchanges will, however, be ready for a new regulatory assault.
FATF stated that its new guidance covers VASP licensing and registration, as well as the Travel Rule. It also “includes principles for information-sharing among VASP supervisors.”
It spoke of the need for “assist countries” in implementing FATF standards. However, it stressed the fact that governments must conform or face consequences.
“The FATF expects countries and the private sectors to implement FATF standards for virtual assets and VASPs as quickly as possible, particularly in light of this updated guidance.”