Global Standard For Crypto Anti-Money Laundering Nears

The head of the Financial Action Task Force expressed confidence that a global standard on cryptocurrency anti-money laundering will be available in October this year.

Financial Action Task Force (FATF) president Marshall Billingslea said a global standard for anti-money laundering (AML) that would apply to cryptocurrencies is nearing finalization.

In an interview with the Financial Times, Billingslea said he is optimistic that worldwide standards could be established next month when the FATF holds its plenary and agrees to fill in “gaps” all nations face and to discuss which of the proposed standards require updating to include digital assets.

"It is essential that we establish a global set of standards that are applied in a uniform manner," he said.

Over the past few months, the task force made significant advancements in its effort to establish a “consensus across nations,” after G20 member-states requested to hasten the process and calendar the matter as urgent.

At present, Billingslea said rules and standards about digital assets and virtual currencies are “very much a patchwork quilt or spotty process,” which are “creating significant vulnerabilities for both national and international financial systems.”

At their July meeting, the G20 decided to wait until October of this year before announcing any specific measures on virtual currencies. The FATF said the meeting, held in Argentina, had agreed to review first the results of the review on AML and counter-terrorist financing (CTF) standards.

"We reiterate our March commitments related to the implementation of the FATF standards, and we ask the FATF to clarify in October 2018 how its standards apply to crypto-assets," the group said in a communique in July.

The task force is also expected to review the methodology and figure out the schedule of its implementation once it agrees on the new rules.

Although the world's central banks do not regulate digital currencies, they are stored digitally using electronic identities, giving its owners the opportunity to remain anonymous. This feature makes cryptocurrencies suspect to being used in illegal activities such as the funding of terrorists and the purchase of drugs and guns, as well as making them a favorite target for hackers.

However, Billingslea said despite the risks associated with virtual currencies, they also present “a great opportunity.” Commenting further on regulation, the FATF head added, “you can’t tilt too far in one direction or another” since blockchain “will continue to evolve.”