UK crypto businesses to comply with FATF Travel Rule beginning in September

August 17, 2023 Coin Telegraph

AML

The U.K. passed legislation in 2022 to make it one of the few countries in compliance with the extension of the Travel Rule to crypto.

Crypto asset businesses in the United Kingdom will be required to comply with Financial Action Task Force (FATF) Anti-Money Laundering and Counter-Terrorist Financing rules, known collectively as the Travel Rule, beginning Sept. 1, a statement from the Financial Conduct Authority (FCA) reiterated Aug. 17. This will bring the U.K. into conformity with FATF standards set in 2019.

The Travel Rule requires virtual asset service providers (VASPs) to share customer information when making transfers to help identify suspicious transactions. The U.K. passed legislation to begin enforcing the Travel Rule in July 2022.

U.K. crypto businesses will be expected to implement the Travel Rule fully by Sept. 1 when sending or receiving crypto assets in the U.K. or jurisdictions that have already implemented the rule. Businesses will be responsible for compliance when using third-party vendors as well.

The Travel Rule is designed to bring greater transparency to cryptoasset transfers, making it harder for criminals to use #crypto for illegal activity.https://t.co/kmB6rgMn5e
— Financial Conduct Authority (@TheFCA) August 17, 2023

When transacting with VASPs in jurisdictions that have not implemented the Travel Rule, the originating U.K. business must take steps to determine if the recipient is capable of receiving the required information in any way and to collect and store the information in any case. When a U.K. crypto business is the recipient of a transfer, it will be required to use discretion:

*FCA instructions on Travel Rule implementation. Source: U.K. Financial Conduct Authority*

The FATF, an intergovernmental task force established by the G7 in 1989, created the Travel Rule in 2012 for traditional financial institutions and extended the rule to VASPs in 2019. It has reported limited progress with its implementation, saying in June that less than half of the countries it had surveyed had taken any steps to implement the rule. A survey conducted in 2022 found that 29 of 98 countries had passed legislation on the rule, but only 11 were enforcing it.

Crypto asset businesses in the U.K. are facing a growing number of regulatory requirements. New FCA marketing standards come into force in October. The FCA published a consultative paper on comprehensive crypto regulation in February.

Magazine: Should we ban ransomware payments? It’s an attractive but dangerous idea

India puts forward suggestions for G20 crypto roadmap

August 2, 2023 Coin Telegraph

Coin Telegraph

The country emphasises the necessity of dealing with digital assets’ risks for developing economies.

India, the nation currently presiding in the G20, supported the Financial Stability Board’s recommendations for the global crypto framework, published in July. The country also emphasises the necessity of dealing with digital assets’ risks for developing economies.

On August 1, India’s Presidency Note for input in a roadmap on a global framework for crypto was published on the page of G20, an intergovernmental forum of the 20 largest economies in the world. The document concurs with the guidelines, written by the FSB, the Financial Action Task Force (FATF) and International Monetary Fund (IMF).

However, the Presidency Note suggests some additions. Among them is an emphasis on developing countries — while the IMF pays attention to developing economies’ specifics in its potential guidelines for crypto, India urges FSB to implement them as well. It also calls for outreach to all jurisdictions to “generate awareness of risks”, starting from countries with higher crypto adoption, and to extend the future regulatory approach to the digital economy beyond the G20 scope.

As revealed in the Note, the so-called Synthesis Paper by IMF and FSB will come out at the end of August and provide a broad roadmap to be considered for adoption by the G20.

In July, FSB published its guidelines for crypto and stablecoins in particular. The FSB states that crypto platforms must segregate clients’ digital assets from their own funds and clearly separate functions to avoid conflict of interest, with regulators ensuring tight cross-border cooperation and oversight. The guidelines also include the obligation for stablecoin issuers to obtain a national license in any single jurisdiction before they can operate there.

Magazine: ‘Elegant and ass-backward’. Jameson Lopp’s first impression of Bitcoin

AML rules for digital assets to come into effect in UAE

May 31, 2023 Coin Telegraph

AML

The licensed financial institutions would be required to verify the identities of all customers.

Under new rules from the Central Bank of the United Arab Emirates (CBUAE), licensed financial institutions (LFIs) would be required to verify the identities of all customers. The update will come into effect “within a month” by the end of June.

On May 31, the CBUAE published guidance for LFIs on risks “related to virtual assets and virtual assets service providers.” A 44-page document specifies the new rules on Anti-Money Laundering and Combating the Financing of Terrorism for banking institutions engaging with crypto in the UAE. It takes into account Financial Action Task Force global standards.

LFIs, in the central bank’s definition, are all the non-crypto financial institutions establishing a relationship with virtual asset providers (VASPs), including banks, finance companies, exchange houses, payment service providers, registered hawala providers and insurance companies.

According to the guidance, LFIs should submit a request to the central bank for non-objection to open accounts for each VASP on a case-by-case basis. Any collaboration with VASPs without a national license is prohibited.

Besides the general verification process for customers before establishing any relationship, LFIs would be required to “understand the nature of the customer’s business.” This step suggests creating a profile of the customer, including the types and volumes of transactions the customer is expected to engage in.

The LFIs would also have an obligation to monitor the volumes of non-institutional, individual customers’ crypto transactions with VASPs from “high-risk jurisdictions.” In these cases, customers can only transfer virtual assets to their own account outside the UAE-licensed VASP ecosystem.

Meanwhile, CBUAE representatives met with their counterparts from the Hong Kong Monetary Authority to discuss cooperation on digital asset regulations. The two central banks also pledged to facilitate discussions on “joint fintech development initiatives and knowledge-sharing efforts” with each region’s respective innovation hubs.

Magazine: Guide to Osaka, Japan’s second-biggest city

BitFlyer adopts crypto deposit limits to comply with Travel Rule

May 30, 2023 Coin Telegraph

AML

While adopting restrictions on transactions between exchanges, bitFlyer still supports transactions to and from self-custody wallets like MetaMask.

Cryptocurrency exchanges in Japan are preparing for the enforcement of the Financial Action Task Force’s Anti-Money Laundering (AML) regulations known as the Travel Rule.

On May 30, major Japanese crypto exchange bitFlyer announced the adoption of measures in response to the enforcement of stricter AML standards targeting crypto transactions in Japan.

BitFlyer has introduced restrictions on deposits and transfers, disabling transactions to and from exchanges that are not part of the Travel Rule Universal Solution Technology (TRUST) network. Adopted by major industry firms like Coinbase and Crypto.com, Trust is a platform allowing exchanges to securely manage customer data legally required by the Travel Rule.

*How the TRUST network works. Source: Notabene*

BitFlyer’s latest restrictions relate to 21 countries and regions that require information notification based on the Travel Rule. In the announcement, the listed countries and regions are shown in the table, including jurisdictions like the United States, Canada, Hong Kong, Singapore and others.

There are also restrictions on the types of crypto assets supported by TRUST. BitFlyer currently facilitates TRUST transactions for cryptocurrencies like Bitcoin (BTC) and Ether (ETH), as well as ERC-20 assets like Shiba Inu (SHIB), Polygon (MATIC) and others.

Effective immediately, BitFlyer’s new AML restrictions apply to all corporate and individual customers who deposit and send crypto assets using the exchange.

According to the announcement, Coincheck is the only Japanese exchange part of the TRUST network and can interact with bitFlyer. At the time of writing, Coincheck and bitFlyer only support BTC transactions via TRUST. More cryptocurrencies, including ETH and ERC-20 tokens, are coming in the near future, bitFlyer noted.

While adopting significant restrictions on transactions between exchanges, bitFlyer still supports transactions to and from self-custody wallets like MetaMask.

BitFlyer did not immediately respond to Cointelegraph’s request for comment. This article will be updated pending new information.

The news comes amid Japan’s preparations to enforce new crypto AML restrictions starting from June 1. On May 23, the Japanese parliament decided to strengthen AML measures to bring the local crypto framework in line with global crypto regulations. The new rules require any platform processing a crypto transfer greater than $3,000 to pass on customer data to the recipient exchange or institution.

Magazine: Crypto City: Guide to Osaka, Japan’s second-biggest city

Japan’s crypto Anti-Money Laundering measures to start in June: Report

May 24, 2023 Coin Telegraph

AML

The Japanese parliament has decided to roll out tougher AML procedures in line with the “travel rule.”

Lawmakers in Japan have decided to enforce stricter Anti-Money Laundering (AML) measures to trace cryptocurrency transactions from June 1.

On May 23, the Japanese parliament made the decision to roll out tougher AML procedures from next month, according to a report the same day from local media outlet Kyodo News.

The move aims to bring Japan’s legal framework in line with global crypto regulations.

Lawmakers revised the AML legislation in December after it was deemed insufficient by the international financial watchdog, the Financial Action Task Force (FATF).

According to reports, a vital feature of the new measures is the enforcement of the “Travel Rule” to keep a more accurate track of criminal proceeds.

The travel rule requires any financial institution processing a crypto transfer greater than $3,000 to pass on customer information to the recipient exchange or institution. The data should include the name and address of the sender and recipient and account information.

The Travel Rule was discussed by global leaders in mid-May at the G7 meeting held in Japan, with the G7 Committee clear in its support of the Travel Rule for crypto transactions.

It supported FATF initiatives on accelerating global standards for crypto “including the ‘travel rule’, and its work on emerging risks, including from DeFi arrangements and peer-to-peer transactions.”

“G7 countries should lead by example and regulate the crypto sector so that no safe havens exist for illicit crypto transactions”#FATF President T. Raja Kumar´s message to #G7 leaders ahead of the summit in Japan
Read article: https://t.co/l1OTdjGgLY
: https://t.co/GqHhVwoqY9 pic.twitter.com/uDurg1QSDu
— FATF (@FATFNews) May 18, 2023

Japan was one of the early adopters of crypto, legalizing it as property. Crypto regulations in Japan are some of the most stringent globally.

Japan’s financial regulator, the Financial Services Agency, tightened rules on crypto exchanges following the major hacks of the exchanges Mt.Gox and Coincheck.

The FSA has several rules for exchanges to protect customers including separate holdings of customer and company assets, with holdings verified in annual audits.

Investors cannot borrow more than twice their investments for leveraged trades on exchanges. Licensed crypto exchanges are also required to hold at least 95% of customer funds in cold wallets.

In April, the Web3 project team of Japan’s ruling Liberal Democratic Party released a white paper proposing ways to expand the country’s crypto industry.

Magazine: Crypto City: Guide to Osaka, Japan’s second-biggest city

US Senators Reintroduce ‘Accountability for Cryptocurrency in El Salvador (ACES) Act’

May 16, 2023 Bitcoin.com

Over 200 Jurisdictions Agree on Timely Implementation of FATF Crypto Standards

February 26, 2023 Bitcoin.com

FATF agrees on roadmap for implementation of crypto standards

February 24, 2023 Coin Telegraph

AML

Part of the FATF's ‘Travel Rule’ includes recommendations that financial institutions obtain information on the originators and beneficiaries of certain crypto transactions.

The Financial Action Task Force, or FATF, reported its delegates had come to an agreement on an action plan “to drive timely global implementation” of global standards on cryptocurrencies.

In a Feb. 24 publication, the FATF said the plenary for the financial watchdog — consisting of delegates from more than 200 jurisdictions — met in Paris and came to a consensus on a roadmap aimed at strengthening “implementation of FATF Standards on virtual assets and virtual asset service providers”. According to the task force, in 2024 it will report on how FATF members have moved forward on implementing the crypto standards, which includes regulation and supervision of VASPs.

“The lack of regulation of virtual assets in many countries creates opportunities that criminals and terrorist financiers exploit,” said the report. “Since the FATF strengthened its Recommendation 15 in October 2018 to address virtual assets and virtual asset service providers, many countries have failed to implement these revised requirements, including the ‘travel rule’ which requires obtaining, holding and transmitting originator and beneficiary information relating to virtual assets transactions.”

The FATF plenary has concluded. Delegates of governments from around the world discussed a range of money laundering and terrorist financing issues.

See the outcomes of the plenary here➡️ https://t.co/FdC6ILFNRW
#FollowTheMoney pic.twitter.com/Ja0tLFrca5
— FATF (@FATFNews) February 24, 2023

Part of the FATF's ‘Travel Rule’ includes recommendations that VASPs, financial institutions, and regulated entities in member jurisdictions obtain information on the originators and beneficiaries of certain virtual currency transactions. As of April 2022, the financial watchdog reported that many countries were not in compliance with its standards on Combating the Financing of Terrorism (CFT) and Anti-Money Laundering (AML).

Japan, South Korea and Singapore have been among the countries seemingly most willing to implement regulations in accordance with the travel rule. Some nations including Iran and North Korea have reportedly been placed on the FATF’s ‘grey list’ for monitoring suspicious financial activity.

Argentina to Revamp Anti Money Laundering Law, Proposes Creation of VASP Registry

November 28, 2022 Bitcoin.com

After Years of Uncertainty, Cryptocurrency Exchanges Can Open Bank Accounts in Chile

October 30, 2022 Bitcoin.com

fatf