Tuesday, October 26, 2021
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International regulation for Bitcoin is now ready, FATF announces

The Financial Action Task Force (FATF) reported that they have defined the new regulatory standards for Bitcoin (BTC), cryptocurrencies and digital asset service providers. The agency expects to release the guide on October 28.

The announcement comes after several discussions and postponements of the publication of the regulation, such as the one reported by Cryptoreportage last June. The reason for the procrastination at the time, according to Siân Jones, senior partner at XReg Consulting, a financial services policy and strategy firm in the field of crypto assets, was because there was “probably not enough time to process and deliberate the volume of responses they received.

Currently, the body appears to have tied up the loose ends after months of meetings. One of the most relevant approaches is directed at the questioned “travel rule” and virtual asset service providers (VASP), according to a report presented on October 21.

The Group confirmed that they have a defined guide for the “licensing and registration of VASPs”. Regarding the ‘travel rule’, the document includes ‘principles of information exchange and cooperation between VASP supervisors’.

“This updated guide is intended to help countries and the private sector implement the FATF standards. The FATF expects countries and the private sector to implement the standards on virtual assets and VASP as soon as possible,” the agency said.

t is important to note that the travel rule is a regulation that must be adopted by service providers with virtual assets, including exchanges. The objective is to share information between them about users who carry out operations that exceed USD 1,000. While VASPs are all those services that function as cryptocurrency exchange, support or development platforms.

The Group will also be attentive to the movements that occur in sectors such as NFT and DeFi.

The agency maintains that they will be “vigilant and closely monitor” virtual assets, in order to detect any “changes that require further review or clarification” based on the new guide . The surveillance includes stablecoins, tokens, non-fungible tokens (NFT) and decentralized finance (DeFi).

It is worth remembering that the FATF is a group dedicated to the fight against money laundering and the financing of terrorism  on a global scale.

The FATF is an international body whose recommendations are not normative, that is, it does not establish laws as these are the responsibility of each jurisdiction. In any case, member countries tend to abide by the Group’s recommendations in order to avoid being sanctioned or included on “black lists”.

The travel rule is questioned

As previously mentioned, the travel rule is one of the regulations most questioned by various actors in the world of cryptocurrencies, specifically because they consider it a violation of user privacy.

One of those who has raised their voice against the rule is Coin Center. It is an organization that advocates for the rights of users over open blockchain networks, as reported by Cryptoreportage.

They argue that the rule violates the privacy of Bitcoin users, cryptocurrencies and service providers, even those that allow P2P exchanges.

Another sector of the bitcoiner community has the opinion that the anti-money laundering measures, proposed by the FATF,  have had serious consequences in terms of financial exclusion , commercial friction, bureaucracy, regulatory adequacy and violation of privacy, among other aspects.

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