According to reports, the Financial Action Task Force (FATF) will monitor countries’ enforcement of anti-money laundering (AML) laws for cryptocurrency providers on an annual basis.
The Financial Action Task Force (FATF) may “grey list” nations that don’t follow its anti-money laundering (AML) regulations for cryptocurrencies.
Al Jazeera reported on November 7 that sources indicated the international financial watchdog planned to carry out yearly checks to make sure nations are obeying AML and counter-terrorist funding (CTF) regulations on cryptocurrency providers.
The FATF’s list of nations that it considers “Jurisdictions under Increased Monitoring” is known as the “grey list.”
According to the FATF, the nations on this list have agreed to address “strategic inadequacies” within predetermined timelines and are subsequently the subject of intensified surveillance.
Contrary to the FATF “blacklist,” which includes Iran and the Democratic People’s Republic of Korea, it refers to nations with “serious strategic inadequacies in relation to money laundering.”
The grey list now includes 23 nations, including Syria, South Sudan, Haiti, and Uganda.
Despite being on the grey list, crypto hotspots like the United Arab Emirates (UAE) and the Philippines have made a “high-level political commitment” to cooperate with the international financial watchdog to improve their AML and CFT regimes, according to FATF.
Prior to taking 34 steps to address FATF’s concerns, Pakistan was also on the list, but they are no longer under greater scrutiny.
While failing to adhere to the crypto AML criteria won’t automatically place a country on the FATF’s grey list, it might harm its overall rating, tipping some to slip into enhanced monitoring, according to one of the unnamed sources quoted by Al Jazeera.
Many nations, particularly those with virtual asset service providers (VASPs), are not in conformity with the AML watchdog’s rules for preventing the financing of terrorism (CFT) and anti-money laundering, according to a report from April 2022. (AML).
VASPs operating in certain nations are required to have a license or registration under FATF rules.
It was discovered in March that a number of nations, including the Philippines, Malta, the Cayman Islands, and the United Arab Emirates, have “strategic inadequacies” in terms of AML and CTF.
Cash and hawala have been the “predominant methods” of financing terrorism, according to Svetlana Martynova, the UN’s coordinator for countering terrorist financing, who made this observation in October.
Martynova did draw attention to the fact that certain technology, like cryptocurrency, has been employed to “create opportunities for abuse.”
“If they’re excluded from the formal financial system and they want to purchase or invest in something with anonymity, and they’re advanced for that, they’re likely to abuse cryptocurrencies,” she said during a “Special Meeting” of the UN on Oct. 28.
