The Financial Action Task Force (FATF) has urged nations to enact the “Travel Rule” to combat money laundering and terrorism funding activities facilitated by cryptocurrencies. The FAFT travel rule was introduced in June 2019 and underwent its most recent update in June 2022. The report will discuss North Korea’s illegal virtual asset operations, as well as emerging risks like stablecoins, decentralized finance, non fungible tokens, and peer-to-peer transactions.
FATF Asks Countries To Implement Travel Rule To Protect From Terrorism By Cryptocurrencies
The Financial Action Task Force has once again urged nations to enact the “Travel Rule” in order to stop the money laundering and terrorism funding activities made possible by cryptocurrencies.
The Financial Action Task Force (FATF), a global organization monitoring money laundering, has called for the regulatory deficiencies in the virtual asset compliance system to be filled. More than 200 delegates attended the meeting in Paris to discuss the acceptance rate of the institution’s recommendations regarding virtual assets and virtual asset service providers (VASPs).
The UN organization, whose job it is to encourage tactics to fight money laundering and terrorist financing, stated on June 23 that “many” member states have not followed the regulation. The request follows a series of FATF meetings held at its Paris headquarters.
According to a study, “more than half” of the participants reported they had not made any steps to put the rule into effect:
“More than half of survey respondents have not taken any steps towards implementing the Travel Rule, a key FATF requirement to prevent funds from being transferred to sanctioned individuals or entities.”
To stop “criminals” from taking advantage of “significant loopholes” not covered by regulation, the FATF encouraged nations to put anti-money laundering and counter-terrorism financing measures in place “without delay” for crypto-related operations.
Only 29 of the 98 jurisdictions surveyed in March 2022 by the FATF had met the criteria necessary to be included in the travel regulations at the time, and only a small portion of these jurisdictions had begun enforcing them.
In order to combat the anonymity of illicit cryptocurrency transactions, the FAFT travel rule was put into place. It debuted in June 2019 and underwent its most recent update in June 2022. At the meetings, FATF members approved a further amendment to the rules.
On June 27, FAFT announced it would release a report urging member nations to put its recommendations into practice in order to address the vulnerabilities that it claims criminals try to exploit.
According to FAFT, the report will discuss North Korea’s illegal virtual asset operations, where allegedly stolen money is channeled into its WMD program.
The paper will also include illegal activity from other “emerging risks,” like stablecoins, decentralized finance, non fungible tokens, and peer-to-peer transactions.
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.
Source: https://www.thecoinrepublic.com/2023/06/26/fatf-says-implementation-of-travel-rule-remains-relatively-poor/