Countries To Face ‘Grey List’ In Crypto Anti-Terror Crackdown | Crypto News
Taipei, Taiwan – Countries that fail to implement anti-money laundering guidelines for cryptocurrencies could be added to a “grey list” that includes Syria and Haiti as part of a global watchdog’s plans to strengthen the examination of virtual assets.
The Financial Action Task Force (FATF) is preparing to carry out annual audits to ensure that countries apply anti-money laundering and anti-terrorist financing rules to crypto providers operating in their jurisdiction, said to Al Jazeera two sources familiar with the case.
The use of annual reviews – instead of mutual evaluations which take place in five-year cycles – will give non-compliant countries less time to enact the standards set by the intergovernmental organization, increasing the risk that they will be added to a “grey list” of countries under increased surveillance, according to the sources, who spoke on condition of anonymity.
One of the sources said that while breaking the rule would not automatically result in a greylisting, it would affect a country’s overall rating, potentially bringing some jurisdictions closer to the listing threshold.
Plans for annual audits have raised fears within the crypto industry that governments may enact sweeping bans on crypto service providers or pressure banks to stop servicing platforms in order to to avoid a FATF list.
In response, crypto industry leaders are preparing to unveil a set of proposals at the G20 leaders’ summit in Bali this month aimed at minimizing the potential fallout for cryptocurrency users and exchanges.
“There is a real risk that this will lead to countries debanking crypto exchanges, which will affect the end user – this is serious,” said Ron Tucker, co-founder of the International Digital Asset Exchange Association (IDAXA), a crypto industry representative body, to Al Jazeera.
“What is at stake is financial inclusion. Shutting down this new asset class will really set back those in developing countries who don’t have access to banking services as well as younger generations in developed countries for whom traditional investments like real estate remain out of reach.
The FATF, founded by the G7 in 1989, did not respond to Al Jazeera’s requests for comment.
While the FATF has no enforcement powers and relies on governments to implement its recommendations, non-compliant countries face significant reputational damage that risks disrupting investment flows and trade. access to the global financial system.
The FATF has extended Recommendation 16, which calls on countries to collect identifying information on recipients and beneficiaries of wire transfers, to virtual assets in 2019.
Ahead of the G20 summit to be held on November 15-16, IDAXA is preparing to table a policy framework proposal at the meeting aimed at minimizing disruption to crypto users and ensuring that exchanges are not suddenly frozen from the start. global financial system.
IDAXA members will meet with FATF and finance leaders during V20, a two-day dialogue on virtual assets taking place on the sidelines of the G20 summit. IDAXA will seek to ratify its proposed framework on the second day of the summit, the sources said.
Bali marks the first time the V20 has been recognized as an official G20 event and will take place inside the summit’s ‘red zone’, where world leaders congregate.
Industry executives say bringing the event to the G20, a forum of 20 major economies, including the European Union, reflects the growing importance of cryptocurrency and blockchain technologies in the global economy. international financial system.
Event organizers said a plenary discussion on Nov. 15 would give policymakers an opportunity to communicate their goals to the crypto industry before IDAXA seeks support from regulators to ratify the proposed framework.
Details of IDAXA’s proposals have yet to be confirmed, but Tucker said the trade association would seek to improve on elements outlined at the previous V20 in Osaka in 2019 so that countries are able to better apply FATF guidelines.
It will then be up to governments to follow through, Tucker said.
“Industry has done its part with FATF, it is now up to national governments to implement FATF guidelines in regulation,” Tucker said. “The greylist threat should be a call to action that they will recognize.”
“This V20 could be our last chance to turn things around,” he added. “If we get regulation right now and investor confidence returns, we could see a crypto spring just around the corner. Otherwise, we risk having a long winter.