FATF releases tougher rules for crypto sector

Posted 24 June, 2019

The Financial Action Task Force announced its decision to tighten rules for the cryptocurrency segment last Friday, including the introduction of mandatory compliance with AML and CFT measures like in traditional financial sector for all crypto trading platforms and other crypto services providers.

Despite the negative statements towards such move and warns that it could entail adverse consequences for the sector, FATF has determined that exchanges dealing with cryptos have to exchange the data of the users when they make transactions between platforms.

According to the released data, the platforms have to provide the name of the sender with wallet information and name of a receiver with wallet information along with the physical address of the sender, passport/ID data or user identification that connects with the company, date or place of birth.

As a result, the regulators of the FATF members (37 countries) should monitor the compliance of new rules and make sure that all the subject parties exchange and hold the above-mentioned information.

The implementation period is 12 months with the first inspection to be made by FATF in June 2020.

The market experts and leading analytical services attempted to convince the authority that such move would be the real challenge for the industry to accept since it would be even barely possible to accept the standards applied to the banking sector. In this situation, they also warned that the crypto business can go underground. 

At the same time, all suppliers of crypto services (individuals or companies) will now have to get license or registration in a certain jurisdiction, which means that the corresponding authorities should clarify that beneficiaries are not criminals. If the providers intend to change the form of ownership or business model, the regulatory permission is required. 

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