Secretary of the FATF: «not all cryptographic firms comply with AML rules.»

16.11.2020
FATF Executive Secretary and G20 representative David Lewis said not all cryptographic firms comply with AML.

Last June, the Financial Action Task Force (FATF) published its final list of recommendations to prevent money laundering and terrorist financing through cryptov currencies. Lewis mentioned the «Travel Rule» principle regarding the exchange of customer information. This principle aims to reduce the risk of illegal use of virtual assets and to regulate cryptographic firms in accordance with traditional banking rules.

In his speech at the conference, Lewis said that most jurisdictions have already implemented these guidelines in their domestic legislation. But virtual asset service providers (VASPs) are extremely slow in adapting to FATF.
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FATF Secretary noted the progress of cryptographic organizations technically as they try to find new solutions for compliance. However, the Travel Rule is not being implemented on a large scale in the private sector. Lewis added that financial leaders of G20 countries continue to study possible risks related to compliance. According to him, during the pandemic, cryptographic currency became more frequently used for the movement of illegal proceeds, including with the involvement of special networks for money-laundering;

While the total amount of cryptov currencies used for illegal activities remains low, digital currencies are still used for money laundering from the sale of drugs and weapons, child exploitation, human trafficking and sanctions evasion. Therefore, G20 countries are concerned that the cryptographic industry uses various mechanisms and tools to improve confidentiality.

We are talking about decentralized exchanges, anonymous crypto assets and crypto mixers. Particular suspicions are raised by firms that often change their jurisdictions. Lewis also said that in June 2021 FATF plans to present an updated version of its guidelines;

Recall that at the beginning of the year, the exchange of cryptographic derivatives Deribit «pereyehala» from the Netherlands to Panama due to the new rules against money laundering (AML), and last month the CEO of Ripple Brad Garlinghouse stated that the company may move from the U.S. to the UK. However, Garlinghouse explained that such actions are caused by the uncertainty of the regulation of the cryptographic industry in the US and the lack of a clear legal status of the XRP.
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