PARIS—With the United States recently completing its one-year term as the president of the Financial Action Task Force, the organization has issued guidance on cryptocurrency-provider compliance.
Treasury Secretary Steven Mnuchin delivered the closing remarks at the plenary session of the FATF’s recent meeting in Orlando, stressing the importance of new global standards agreed to by FATF to protect cryptocurrency assets from abuse by illicit actors.
By adopting the standards and guidelines agreed to, “FATF will make sure that virtual asset service providers do not operate in the dark shadows,” Mnuchin said.
The Latest Requirements
The latest requirements for cryptocurrency service providers have been in the works since at least October. FATF, the global standard setting body for anti-money laundering and counter-terrorism finance policies, said that the new obligations require countries to assess and mitigate the risks associated with cryptocurrency service providers; license or register the providers; subject them to regulatory scrutiny; and penalize them when failures arise, Kharon.com said.
Companies operating in the cryptocurrency services sector will be required to implement the same compliance procedures as traditional financial institutions, according to FATF. The requirements around cryptocurrency-service providers come amid heightened scrutiny in the sector, including the recent news that Facebook Inc. has developed a currency called Libra, Kharon.com said.
FATF will monitor implementation by countries and companies, and conduct a 12-month review next June, it said.
“The threat of criminal and terrorist misuse of virtual assets is serious and urgent, and the FATF expects all countries to take prompt action,” according to FATF.