Countries Facing ‘Grey List’ In Anti-Terror Attacks Against Crypto | 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 under a global watchdog’s plans to tighten controls on virtual assets.
The Financial Action Task Force (FATF) is preparing to conduct annual checks to ensure countries are enforcing anti-money laundering and anti-terrorist financing rules on crypto providers operating in their jurisdiction, two sources with knowledge of the matter told Al Jazeera.
The use of annual reviews – rather than mutual evaluations that run over five-year cycles – will give non-compliant countries less time to adopt standards set by the intergovernmental organization, increasing the risk of being added to a “grey list” of countries subject to increased surveillance, according to the sources, who spoke on condition of anonymity.
One of the sources said that while failure to comply with the rule would not automatically lead to a gray listing, it would affect a country’s overall rating, potentially moving some jurisdictions much closer to the threshold of being listed.
The plans for annual checks have sparked fears in the crypto industry that governments could enact blanket bans on crypto service providers or pressure banks to stop operating platforms to avoid a FATF listing.
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 de-banking 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 representative body for the crypto industry. to Al. Jazeera.
“What is at stake is financial inclusion. Shutting down this new asset class will really set back those in developing countries without access to banking services, as well as younger generations in developed countries for whom traditional investments such as property 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 access to the global financial system.
The FATF extended Recommendation 16, which encourages countries to collect identifying information about payees and recipients of wire transfers, to virtual assets in 2019.
Ahead of the G20 summit which takes place on 15-16 November, IDAXA is preparing to present a proposed policy framework at the gathering aimed at minimizing disruption to crypto users and ensuring that exchanges are not suddenly frozen out of the global financial system.
IDAXA members will meet with FATF and finance officials at the 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 sanctioned as an official G20 event and will take place within the summit’s “red zone”, where world leaders gather.
Industry leaders say bringing the event into the G20, a forum of 20 major economies including the European Union, reflects the growing importance of cryptocurrency and blockchain technologies in the international financial system.
Organizers said a November 15 plenary discussion would give policymakers an opportunity to communicate their goals to the crypto industry before IDAXA seeks regulators’ support to ratify the proposed framework.
The details of IDAXA’s proposal have yet to be confirmed, but Tucker said the trade association would seek to improve the elements outlined at the previous V20 in Osaka in 2019, so that countries could better enforce FATF guidelines.
It is then up to the authorities to follow up, said Tucker.
“The industry has done its bit with the FATF, now it’s up to national governments to implement the FATF guidelines into regulation,” said Tucker. “The threat of blacklisting should be a call to action they will recognize.”
“This V20 could be our last chance to turn things around,” he added. “If we get the regulation right now and investor confidence returns, we could see a crypto spring around the corner. Otherwise, we could have a long winter.”
