Financial Action Task Force (FATF) head T. Raja Kumar says G7 countries should take a more proactive approach to regulating the “lawless crypto space,” where illicit financial transactions continue to be allowed around the world. said that it is necessary to take
Kumar commented: letter The report will be released ahead of the 2023 G7 summit scheduled for May 19 in Hiroshima, where the group will discuss a variety of topics this year, including cryptocurrencies and industry-wide regulation.
Illegal Digital Financial Flow
The FATF secretary said the watchdog was working “on multiple fronts” to help countries combat “the digital financial tide” that “fuels crime and terrorism.”
But Kumar said eradicating these flows will require “global concerted action” to ensure that there can be no “safe haven” for such transactions in the global financial system. It is said that
The FATF has updated its global standard recommendations on combating money laundering, terrorist financing and proliferation finance to include crypto-assets and related financial activities.
But Kumar said countries have made “relatively insufficient” progress in implementing these new standards as part of the recommendations.
As of 2019, regulators found that only 27% of countries were compliant with the latest standards, including cryptocurrencies, while the remaining majority, 73%, were either fully or partially non-compliant, making the cryptocurrency industry’s I’m assuming he hasn’t started directing yet.
Kumar added that some G20 countries are also among the non-compliant 73%. he wrote:
“This unacceptable situation must be addressed urgently.”
The FATF Secretary said many countries had no experience in dealing with illicit financial flows as they went digital, and that oversight bodies would seek new measures, including the so-called “travel rule,” to help countries adapt. He said he plans to expand the program.
The Travel Rule obliges crypto asset service providers, such as exchanges, to pass information to each other and to regulators on cryptocurrency transactions that exceed certain thresholds.
Updated recommendations
Kumar said the FATF is urging countries to start working immediately in two areas to prevent cryptocurrencies from being used for illicit financial transactions.
The first area is to ensure transparency of beneficial ownership, which is “crucial in combating money laundering, corruption, tax evasion and sanctions evasion”.
Criminals are exploiting lack of transparency in ownership laws to hide their financial activities through complex corporate structures, Kumar said, and countries should implement FATF’s latest recommendations to close these loopholes. Stated.
A second area that countries need to focus on is the collection of criminal proceeds. Kumar wrote that asset recovery helps strengthen trust in law enforcement because it directly assists victims and is an “effective” way to stop economic crime. However, countries have done little to recover assets, and only a fraction of the world’s illicit financial flows have been recovered.
