The Financial Action Task Force (FATF) is set to release new rules and guidelines regarding the cryptocurrency market. Per a report on Bloomberg on June 11, 2019, the upgraded guidance seeks to apply bank rules to the innovative sector.
Old Rules, New Tech
With the continuous growth of the cryptocurrency sector, alongside its anonymity and volatility, more regulatory bodies around the world are introducing regulations to safeguard investors from fraudulent crypto exchanges and combat money laundering.
The FATF, an intergovernmental body with over 30 member states, is aiming to eliminate terrorist financing and money laundering at the international level. Part of this objective thus encapsulates the world of crypto. As such, the authority will reportedly release an upgraded recommendation on June 21, 2019, for how best to regulate the sector.
According to Alexandra Wijmenga-Daniel, who serves as the FATF’s spokeswoman, said the group would:
“Publish a note to clarify how participating nations should oversee virtual assets. The new rules will apply to businesses working with tokens and cryptocurrencies, such as exchanges and custodians and crypto hedge funds.”
However, the body’s new recommendation may not favor crypto exchanges, as companies and asset managers would have to submit details of customers carrying out transactions exceeding $1,000 to the recipient’s service providers.
Commenting on the guideline, Bittrex’s chief compliance and ethics officer, John Roth opined that the anonymity inherent in crypto technologies would make it difficult and costly for exchanges to comply with such a directive.
The upgraded recommendation, which applies bank regulations to cryptocurrencies, is the equivalent using rules from the 20th-century for a 21st-century innovation, according to Kraken’s general counsel, Mary Beth Buchanan.