Countries that ignore crypto-AML rules risk placement on FATF’s “grey list” — Report
Countries that do not comply with anti-money laundering (AML) guidelines for cryptocurrencies may be added to the Financial Action Task Force’s (FATF’s) “grey list.”
According to a report by Al Jazeera on November 7, sources say the global financial watchdog plans to conduct annual checks to ensure countries are enforcing AML and counter-terrorist financing (CTF) rules on crypto providers.
The gray list refers to the list of countries FATF considers “Jurisdictions under enhanced surveillance.”
The FATF says that the countries on this list have committed to solving “strategic deficiencies” within agreed timeframes and are thus subject to increased monitoring.
It differs from the FATF’s “blacklist”, which refers to countries with “significant strategic deficiencies in relation to money laundering”, a list that includes Iran and the Democratic People’s Republic of Korea.
Currently, there are 23 countries on the gray list, including Syria, South Sudan, Haiti and Uganda.
Crypto hotspots such as the United Arab Emirates (UAE) and the Philippines are also on the gray list, but according to the FATF, both countries have made a “high-level political commitment” to work with the global financial watchdog to strengthen their AML and CFT regime.
Pakistan was also previously on the list, but after taking 34 steps to address FATF’s concerns, it is no longer subject to increased monitoring.
One of the anonymous sources cited by Al Jazeera noted that while non-compliance with crypto-AML guidelines would not automatically put a country on the FATF’s gray list, it could affect its overall rating, tipping some to fall under increased surveillance.
Cointelegraph has reached out to the Financial Action Task Force for comment, but has not received a response at the time of publication.
In April 2022, the AML watchdog reported that many countries, including those with Virtual Asset Service Providers (VASPs), are not compliant with Countering Financing of Terrorism (CFT) and Anti-Money Laundering (AML) standards.
According to FATF guidelines, VASPs operating within certain jurisdictions must be licensed or registered.
In March, it found that several countries had “strategic deficiencies” with respect to AML and CTF, including the United Arab Emirates, Malta, the Cayman Islands and the Philippines.
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In October, Svetlana Martynova, Counter-Terrorism Financing Coordinator at the United Nations (UN), noted that cash and hawala have been the “predominant methods” of terrorist financing.
However, Martynova also highlighted that technologies such as cryptocurrencies have been used to “create opportunities for abuse.”
“If they are excluded from the formal economic system and they want to buy or invest in something with anonymity, and they are advanced for that, they will probably abuse cryptocurrencies,” she said during a “special meeting” of the United Nations on October 28.
