Global financial regulator the Financial Action Task Force (FATF) is set to release a revised version of its guidelines on crypto assets and virtual asset service providers (VASPs) on October 28, as a result of a three-day plenary session concluded on Thursday.
In June 2019, FATF announced cryptocurrency guidelines including the FATF “Travel Rules” to prevent money laundering. In June of last year, an evaluation of the status of compliance in each country was conducted and results were announced in June 2021.
The FATF released its 2019 amendments in March of this year but received a reception from the crypto industry which pointed out several privacy and innovation issues in the new guidelines.
In particular, industrial proponents pointed out the expanded definition of VASPs resulting in the imposition of monitoring obligations even on decentralized financial (DeFi) network participants.
Now the latest guidelines are set to be more comprehensive, as per the FATF statement. According to them, the purpose of the latest guidance is to help countries and private companies implement FATF recommendations, explaining how they apply to the cryptocurrency sector.
Specifically, FATF will indulge in recommendations on clear definitions for VASPs and virtual assets, application of FATF standards on stablecoins, and lastly, tools to identify and mitigate the risk of peer-to-peer (P2P) transactions.
The FATF will closely monitor stablecoins, P2P, NFT, and DeFi areas and assess whether standards need to be clarified or revised.