Financial Action Task Force (FATF), made today an announcement that focused on the role of digital currency in money laundering and the need for increased regulation. In his closing remarks, Secretary Steven Mnuchin noted.
The FATF is an intergovernmental organization that focuses on fighting money laundering. It plans to increase control over cryptocurrency exchanges to prevent digital currencies being used for money laundering.
Steven Mnuchin (the U.S. Secretary for the) stated that crypto assets providers will need to comply with anti money laundering (AML), and combating financing of terrorism(CFT) as traditional institutions do. The final guidance was also provided by the organization.
Mnuchin said that cryptocurrency operators should establish features like identity behind crypto fund senders and recipients and conduct due diligence to ensure that they are not engaging illicit activity. Mnuchin stated:
“By adopting these standards and guidelines, the FATF will ensure that virtual asset service providers don’t operate in the shadows. This will allow the FinTech sector to keep one step ahead of rogue regimes, and sympathizers for illicit causes looking for ways to raise and transfer money without detection.
In an interview, Simon Riondet, Europol’s head of financial intelligence, stated that there had been an increase in money laundering using cryptocurrencies. Riondet also stated:
“We are also doing some investigations into the dark web where payments are made using cryptocurrencies, sometimes in Bitcoin [BTC], and they’re switching to anonymised cryptocurrencies.”
Others in the industry have expressed concerns that blockchain technology will need to be fundamentally restructured, or that cryptocurrency exchanges would have to create a parallel system to meet new reporting requirements. Others are worried about the impact of increased compliance costs on the decentralized ecosystem.
