FATF Strengthens Transparency Standards for Crypto and Shell Companies

On September 3rd, FATF Chairman announced the need for enhanced transparency concerning shell companies in the latest assessments, amid rising cryptocurrency usage in illicit cross-border fund transfers.

These changes could increase compliance costs for crypto exchanges and impact the liquidity of tokens like BTC, ETH, USDT, and privacy coins.

FATF’s New Rules Target Crypto Vulnerabilities in Transfers

This change affects crypto regulation with implications for cross-border payments, highlighting transparency and anti-money laundering efforts.

Increased due diligence requirements will impact financial institutions and crypto exchanges significantly.

“The FATF plays an important role in the global fight to counter terrorism and proliferation financing… We are encouraged by the FATF’s adoption of reports that respond to private sector demand for more actionable information to combat financial crime as well as modernizing its standards for domestic and cross-border payments.” — Scott Bessent, Secretary of the Treasury, U.S. Treasury Department.

Market Overview

Did you know? In 2019, FATF’s guidance on the “Travel Rule” prompted crypto exchanges to increase KYC practices, impacting privacy coins significantly.

Bitcoin (BTC) price stands at $111,757.43 with a market cap of $2.23 trillion, marking a 2.25% increase over 24 hours. BTC’s trading volume reached $69.72 billion, while the crypto maintained a market dominance of 57.87%, according to CoinMarketCap.

These changes may create a challenging environment for crypto companies as they navigate the new compliance landscape.