As much as some legislators and others across the globe try to dismiss cryptocurrency, their unwillingness to accept the future of money isn’t deterring efforts to bring a greater amount of legitimacy and regulatory guidance to the space. The Financial Action Task Force (FATF) came up with a set of guidelines, effectively known as the Travel Rule, that it wants countries to implement, and there have already been several examples of countries’ endeavors to comply. In particular, crypto exchanges are being scrutinized more than ever, and a recent review of the trading platforms by the FATF shows that there is still work to be done.
The FATF rules are designed to address issues such as anti-money laundering (AML) and counterterrorism funding (CTF) and align almost perfectly with established regulations for companies operating in the fiat space. The agency established a 12-month window to have the rules implemented by the public and private sectors, which came to a close at the end of June. The FATF then prepared its summary (in pdf) of how well the rules are being implemented.
Out of the 54 countries that were included in the FATF’s review, 35 have already made substantial progress implementing the required rules. Of those who haven’t, work is reportedly underway, and the process is being hampered by infrastructure challenges, as well as the need to focus more resources on the current coronavirus pandemic. However, all have indicated that they are actively moving forward.
The FATF has been proactive during the year following the presentation of the Travel Rule, working with countries and entities to address concerns and help overcome challenges. It is extending the implementation period another year, which will be used to make adjustments to, among other things, cross-border crypto payment guidelines. The CEO of Digital Finance Group, Terry Culver, summed it up best in comments to Cointelegraph, stating, “One challenge is that implementation will face significant challenges from other contradictory regulations for AML and data protection. For example, the FinCen Travel Rule sets U.S. regulation apart from other jurisdictions. Another example is that the EU just determined that the bulk transfer of personal data to the U.S. is not allowed under GDPR.”
The FATF isn’t slowing down, nor is it veering off course. It feels the guidelines it has established are entirely feasible, and will use this next year to tweak them enough to find full implementation by this time next year. This is incredibly good news for many industries whose business models revolve around cross-border activity. The online gambling industry is probably the most notable among this group, with being able to accept deposits and make refunds expensive and challenging in the current environment. Establishing wide-reaching guidelines like those put forth by the FATF is going to go a long way toward helping the crypto ecosystem grow, which will, in turn, allow the online gambling industry to grow, as well.