FATF comes to grips with cryptocurrencies

Cryptocurrencies have burst into our everyday life and are not likely to leave. We can shop with Bitcoin, buying anything from pizza to plane tickets. The latest edition of Samsung’s Galaxy Note 10 smartphone will feature a cryptocurrency wallet. The People’s Bank of China has announced that its own cryptocurrency is about to be launched. Facebook, with its Libra, is getting in the game too. The new cryptocurrency stock exchanges are opening. Thus, the number of users is in an ever state of growth.

The main problem is that only a few countries, including Belarus, have made steps to keep up with the rapidly changing digital world. With that said, on a global scale, crypto industry is not all that well regulated. It leads to cryptocurrencies being used as tools in illegal financial operations, related to money-laundering, tax evasion, etc.

June 21st, 2019 Financial Action Task Force (FATF) published Guidance for a Risk-Based Approach to Virtual Assets and Virtual Asset Service Providers. The aim of this document is to take the cryptocurrency market out of the shadows. The regulations recommend companies, functioning within a cryptocurrency sphere, to adhere to “Know-Your-Customer” (KYC) and Anti-Money Laundering (AML) laws and procedures.

According to FATF, Virtual Asset Service Providers, including cryptocurrency stock exchanges, must store and swap the following information about the customers:

  • sender’s name;
  • sender’s account number used in the transaction (for example, cryptocurrency addresses);
  • sender’s geographical address/national identification number/ customer identification number (not the transaction number)/their date and place of birth;
  • recipient’s name, their account number used in the transaction (for example, cryptocurrency address).

FATF regulations have not become a law yet. Nevertheless, the risk of not following them are still too high. Banks or financial companies, which break these rules, could be blacklisted by FATF and, as a result, lose their license, be eliminated from SWIFT, etc. Most countries will be obligated to apply these regulations. Their international trade and place on the world market will otherwise be put at stake.

In these circumstances, a legal, safe and simple way to work with cryptocurrencies is in great demand. Our fintech company has successfully combined traditional financial tools with digital ones, and introduced our own solution which helps cardholders conduct operations with cryptocurrencies. Cryptocurrency deals, made within our product, undergo the required KYC/AML procedures. Working on this, we took into account all the FATF recommendations. Our customers can feel confident about the reliability of the operations they perform.

Get a step by step guide to start your legal crypto exchange