The Financial Action Task Force (FATF) announced that it will get one step closer to creating international standards for cryptocurrency when it launches its first set of rules in June of 2019.
According to Reuters, the Paris-based global AML watchdog revealed that jurisdictions around the world will be required to license or regulate cryptocurrency exchanges, as well as select firms providing encrypted wallets and firms providing financial services for ICOs. The move aims to stop the use of crypto for money laundering, terrorism financing or other crimes.
How countries implement the rules will be subject to periodic reviews by the FATF, said its president, Marshall Billingslea. If a country fails to abide by the financial regulation or falls short, it could be added to an FATF blacklist that restricts access to the global financial system.
“By June, we will issue additional instructions on the standards and how we expect them to be enforced,” he said.
Just last month, in a new analysis of 2,500 suspected crypto crimes that made use of bitcoin and Ethereum, the Wall Street Journal claimed that nearly $90 million worth of reportedly criminal proceeds have gone through crypto intermediaries in a two-year period.
Countries have attempted to rein in the market. Last year, the U.K. boosted its regulation of bitcoin and other cryptocurrencies by giving the European Union (EU) expanded anti-money laundering rules that would require traders to say who they are and report any activity that appears to be suspicious. And earlier this year it was revealed that the U.S. Treasury’s financial crime unit is picking up enforcement of cryptocurrency platforms that don’t have strong internal mechanisms in place to prevent money laundering.
And while lawyers specializing in anti-money laundering applauded the FATF move, they also warned that it will be difficult to trace the true owner of cryptocurrencies.
“You can put any name down for these coin exchanges, and it doesn’t have to be the ultimate beneficial owner,” said Kyle Phillips at law firm Howard Kennedy in London.