Only 58 of 128 jurisdictions have escalated, the anti-money laundering watchdog said on Friday.

Crypto Guidance - Crypto News

Most of the countries supervised by the Financial Action Task Force (FATF) have not yet established their requirements for companies that handle cryptocurrencies.

Speaking on Friday on the occasion of its second 12-month review of progress in crypto regulation, the intergovernmental watchdog against money laundering (AML) said that so far, 58 out of 128 reporting jurisdictions have implemented its standards. reviewed.

Of these, 52 regulate Virtual Asset Service Providers (VASPs) and six prohibit the operation of VASPs.

Implementing regulations created for traditional finance in pseudonymous crypto by design has been challenging. That said, it has been more than two years since the FATF announced that cryptocurrencies would be subject to its AML rules, and the regulator is now asking laggards to get their houses in order.

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The private sector was praised for its progress in developing technology to implement the FATF "travel rule", which requires companies to identify and share data on those involved in crypto transactions above a certain amount.

"However, most jurisdictions have not yet implemented the FATF requirements, including the 'travel rule'," the FATF said in a press release. "This discourages further investment in the necessary technology solutions and compliance infrastructure."

Gaps in implementation, the FATF said, mean that global safeguards do not yet exist to prevent the misuse of VASPs for money laundering or terrorist financing, leading to "jurisdictional arbitration."

The role cryptocurrencies play in ransomware, very much in the news lately, also received a mention.

"The report also identifies possible future actions by the FATF to prevent the misuse of virtual assets for criminal activities, including by emphasizing actions to help mitigate the risk of the use of virtual assets related to ransomware," said the FATF.

In March, the FATF issued draft guidance that included additional wording on decentralized finance (DeFi) and stable coins. It has received so much feedback on it, the organization said it will not make the VASP rules final until its next plenary meeting in October.

"This revised guidance will help jurisdictions and the private sector to implement the revised standards as a priority," said the FATF.

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