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Fifteen countries, including G7 members Australia and Singapore, have joined forces with the Financial Action Task Force (FATF) to implement a system to collect and share personal data on individuals who participate in cryptocurrency transactions. According to a new report from the Nikkei Asian Review, the system will be planned in detail by 2020 and will be “up and running” after a “few years” have passed.
While the details of the system are not yet publicly known, it will reportedly be used to prevent money laundering, terrorist funding, and other kinds of illicit financial activity through cryptocurrency. Although the system will be designed by the FATF, it will be managed by the private sector after its implementation.
However, there seems to be some confusion around Nikkei’s announcement of the system’s launch. While Nikkei has reported the announcement of the plan, there does not seem to be an official announcement from FATF itself.
Global Digital Finance, an industry membership body that promotes the adoption of best practices for crypto assets and digital finance technologies, told Finance Magnates that in fact, “FATF’s mandate is to provide recommendations and measure effectiveness of implementation. GDF is currently unaware of any announcements from FATF or their Virtual Asset Contact group about plans to build and implement a solution to R16. FATF has previously articulated that they expect the industry to develop the solution, and demonstrate progress toward compliance within 12 months.”
FATF released crypto guidelines in June
In any case, the FATF, an international organization with more than 30 member countries, has been quite active this year with regards to cryptocurrency–in June, the organization published a finalized set of guidelines for the regulation of cryptocurrency assets and service providers that was discussed at the G20 summit in Japan.
After the guidelines were published, the FATF announced that it would be keeping an eye on countries who implement them: “the FATF will monitor implementation of the new requirements by countries and service providers and conduct a 12-month review in June 2020,” the announcement said.
The guidelines required crypto-asset service providers to follow many of the same anti-money laundering (AML) and know-your-customer (KYC) checks that more “traditional” financial service providers do, and to comply with CFT (anti-terrorist financing) protocols.
While the FATF’s guidance not technically legally binding and “does not overrule the purview of national authorities,” countries who do not comply with the guidance risk being put on an international blacklist and thus being denied access to a number of international financial services and losing out on international business opportunities.
The leaders of the G20 summit formally announced their support of the guidelines in early July.
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