Ignoring Crypto AML Rules by Countries Could Result in FATF 'Grey Listing'

Countries ignoring AML Rules will be placed in Grey list Category by FATF.

Countries failing to enforce anti-money laundering(AML) guidelines for cryptocurrencies will be added to the “grey list” of the Financial Action Task Force.

On 7 November 2022, Aljazeera reported that FATF is preparing a roadmap to perform an annual investigation to assure that countries are implementing anti-money laundering and terrorist financing rules on crypto providers functioning in specific countries or jurisdictions.

In an interview with Aljazeera, Ron Trucker co-founder of the International Digital Asset Exchange Association(IDAXA), noted that “There is a real risk this will lead countries to unbank crypto exchanges, which will affect the end user — this is serious.”

A spokesperson of FATF said that FATF does not remark on the assumption in the media, but it hasn’t changed how virtual assets are monitored.

What is ‘Grey List’ of FATF?

The Grey List category primarily describes the involvement of subjected countries with illicit activities like money laundering and terror funding. The list could be seen as a warning for such countries indicating to put on the Black List as the next possible step.

According to the first quarter report of 2022, there are 23 countries on the ‘Grey List’ of FATF, some of which are as follows.

Syria
Turkey
Myanmar
South Sudan
Uganda
Yemen

United Arab Emirates(UAE) is becoming a new crypto hub, and it is believed that Dubai will become a global crypto capital in the future.

UAE and Philippines are also listed under the grey list of FATF. Still, both nations agreed and made a “High-level political commintment” to work with the global financial caretaker to boost their AML and CFT regime.

An anonymous source informed Aljazeera that failing to comply with the rules and regulations will not automatically result in greylisting a nation but also affect the nation’s overall rating, potentially moving some jurisdictions closer to the listing threshold.

What is Black List of FATF?

Subject to the Call for Action, officially known as high-risk jurisdictions, the FATF blacklist point out countries considered lacking in their anti-money laundering and counter-financing of terrorism regulatory system.

The Black List highlights the countries negatively impacting the world and warns of the high money laundering and terrorism financing risks they pose. Countries on this list are likely to be subject to economic sanctions and other prohibitive measures by FATF member states and international organizations.

According to some reliable data for 2020-2021, North Korea, Iran, and Myanmar are the countries included in the blacklist of FATF data for 2022, which is still awaited.

Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing