There’s a lot at stake this week as crypto comes further within the creep of global regulations.
The Financial Action Task Force (FATF), an intergovernmental anti-money laundering (AML) body, wraps its second annual review of progress made by member countries to implement a cryptocurrency compliance framework.
It’s been over two years since the FATF recommended bringing cryptocurrency firms (virtual asset service providers, or VASPs, in FATF parlance) within its regulatory framework. This has created challenges for the industry and regulators alike, particularly around areas like the Travel Rule where third-party VASPs must exchange personally identifiable information (PII) about customers along with transactions.
To further complicate matters, the FATF’s proposed regulations have been forced to expand in step with crypto innovation to accommodate rapidly evolving areas like decentralized finance (DeFi) and stablecoins.
Since the last plenary meeting in March 2021, when FATF issued draft guidence there has been an overwhelming response from the industry. In short, many in the space are worried regulators will take too broad an approach, particularly when it comes to things like DeFi.