The FATF expressed that 52% of countries have proper regulations on digital assets. European Union desires to follow the FATF regulations, including the travel policy.
The new report presented by the Financial Action Task Force (FATF) got called State of the effectiveness and compliance with the FATF standards. It warns that many nations still do not follow the standards applied to the FATF, the entity to combat money laundering and the financing of terrorism (AML/CFT).
According to the document, only 9% of member nations are applying adequate policies and regulatory archetypes for virtual asset service providers such as bitcoin (BTC) and digital assets, in general, to reduce the risks of crimes through them.
In this sense, the group confirmed that it would be more strict with member nations of the organization, such as the United States of America, the European Union (EU), and China, through more evaluations regarding the risks of illegal financial operations.
Laws with a Low Rate of Effectiveness
The new report also highlighted that 52% of the studied nations have appropriate policies and regulatory archetypes. Many countries still face crucial challenges in taking effective procedures commensurate with the risks they have to face.
The report also points out that at least 97% of the 120 nations under study have moderate effectiveness rates in fighting against money laundering and terrorism in the private sector.
The FATF updated its guide in October of last year to regulate service providers with bitcoin and other digital assets worldwide. The regulations suggest requesting reports of monetary transactions, including a rule that requires the maintenance of records linked to those operations.
Additionally, the guidance recommends that operators allow transactions only to and from addresses deemed acceptable, focusing on the risk-based approach.
The EU Bets to Comply with the FATF with New Regulations
Recently, the European Parliament debated a proposal that will make it mandatory to identify all operations with bitcoin and other digital assets in the eurozone, something that the FATF suggests in its guide.
The goal in Europe is for transactions to be completely identifiable, granting and verifying all user data.
They also intend to apply the so-called “travel rule” to virtual asset service providers. This policy needs exchange, support, or development network based on bitcoin and other digital assets to share information among themselves about users who carry out operations surpassing USD 1,000. One of these must share the user’s previously collected and verified data with another when it happens.
Lawmakers believe it is too easy to use digital assets as a vehicle to avoid regulations, but cybercriminals prefer fiat to launder funds.
By: Jenson Nuñez
