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Fifteen countries have outlined plans to Fight Cryptoasset Financial Crime

Fifteen countries have outlined plans to develop a system that can closely monitor cryptoasset transactions to help prevent money laundering and other criminal activity.

Countries including the G7 members, Australia and Singapore – along with global anti-money laundering body the Financial Action Task Force (FATF) – are to develop a system that will gather and share transaction details from individuals, according to a report by Japanese media company Nikkei.

Their short-term goal, the report said, is to announce detailed measures by 2020 and – in the longer term – launch the system a few years later. Once established, the system would be managed by the private sector.

FATF Guidance

Headquartered in Paris, FATF is an intergovernmental initiative of the G7 to advise on policy to help combat money laundering and the financing of terrorism.

In June, the organization reported to the G20 Leaders’ Summit on the impact of virtual assets on its mandate and recommended closer regulatory collaboration between countries.

Earlier in June it published Guidance For a Risk-Based Approach to Virtual Assets and Virtual Asset Service Providers in which it recommended that its 30 member nations must set out rules for cryptoasset service providers, including the monitoring and reporting of suspicious transactions and the sharing of data.

Recommendations

It required in particular:

  • The application of a risk-based approach for virtual asset financial activities and virtual asset service providers
  • Licensing or registration obligations
  • The monitoring or supervision of virtual asset service providers by a country’s competent authority – not a self-regulatory body
  • A range of effective, proportionate and dissuasive sanctions to deal with virtual asset service providers that fail to comply with their anti-money laundering requirements, including the power to withdraw, suspend or restrict licensing or registration
  • Preventive measures such as customer due diligence, recordkeeping and transaction monitoring, among others
  • The provision of the widest possible range of international co-operation between countries and their regulators

Co-operation between the countries outlined in the Nikkei report would, therefore, appear to be a first step towards implementing the recommendations by FATF.

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Written by Ravi Gupat

Ravi grew up in India and graduated in Economics. He is a serial entrepreneur who has founded and exited several companies in tech and media over the past 15 years. He is also an early stage investor and advisor in various blockchain-based companies.

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