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April 20 marked the end of a public consultation on crypto led by the Financial Action Task Force (FATF). The global financial crime watchdog launched a consultation back in March to get private sector views on the matter proposed changes to its crypto guidelines. If adopted, the changes would have major implications for the crypto industry, affecting how regulation should be handled decentralized finance, self-hosted wallets and other topics.
To mark the end of the consultation, the FATF convened a session of its Private Sector Consultative Forum (PSCF), providing industry representatives with a platform to discuss the updated guidance with regulators and law enforcement officials from around the world. Chief Scientist and Co-Founder of Elliptic Tom Robinson presented on trends in cryptocurrency laundering at the Forum, and other industry participants shared their views on the changes proposed by the FATF.
At Elliptik, we submitted a written response to the FATF consultation, which you can read here. In it, we highlight three main observations and areas of concern:
- FATF guidance on applying the VASP definition to decentralized finance is unclear and impractical.
- The extent of illegal activity among P2P transactions in virtual assets is low, and references to disproportionate and impractical measures to address risks should be removed from the FATF guidelines.
- The guidance should provide more specifics on how countries can leverage blockchain analytics for risk management.
Our partners from across the crypto industry also submitted responses to the consultation. We recommend that you read the answers from Blockchain Association, Blockchain for Europe, Digital Chamber of Commerce, CoinCenter, and Global digital finance.
The FATF will decide whether to adopt the proposed changes to its guidelines at a plenary session the week of June 20. Contact us to learn more about how Elliptic can help your business address the challenges presented in the FATF Guidelines.
🇬🇧 UK launches CBDC Taskforce
The UK took important steps this week towards the potential launch of a central bank digital currency (CBDC). Bank of England and HM Treasury announced the creation of the CBDC Working Group this week which will coordinate the UK government’s activities as it explores whether to create a CBDC – or Britcoinas it is called.
🇦🇺 Australia’s securities regulator is working to involve the industry
The head of the Australian Securities and Investments Commission (ASIC) this week promised to work with the crypto industry to ensure that regulation does not hinder financial innovation. Comments followed claims from industry that regulatory requirements for cryptocurrencies in Australia remain unclear.
🇰🇷 South Korea is launching a crackdown on crypto crime
Senior civil servant in South Korea he said this week that the country will conduct an interagency crackdown on illegal activities in cryptocurrencies. Comments follow South Korean launching its crypto regulatory framework March 25.
🇺🇸 The US Congress passed a law to improve the coordination of crypto regulation
US House of Representatives passed the law improve the US regulatory framework for cryptocurrencies. If signed into law, the Eliminating Barriers to Innovation Act would require US regulatory agencies to establish a digital assets task force to improve policy and regulatory coordination. Crypto industry associations have applauded measure as a way to increase US competitiveness in the sector.
Missed our last week’s update? Watch here: SEC Gets Crypto Chief, Proposes Safe Harbor for Innovators
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