Countries that do not adhere to the anti-money laundering (AML) guidelines for cryptocurrencies could find themselves included in the “grey list” of the Financial Action Task Force (FATF).
According to a November 7 report from Al Jazeera, sources say that The global financial watchdog is planning to carry out annual checks to ensure that countries are enforcing anti-money laundering and anti-terrorist financing (CTF) regulations on cryptocurrency providers..
The gray list refers to the list of countries that the FATF considers as “Jurisdictions under increased surveillance”.
The FATF says that countries on this list have committed to resolving “strategic deficiencies” within agreed time frames and are therefore subject to increased oversight.
It differs from the FATF “black list”, which refers to countries with “significant strategic deficiencies in relation to money laundering”a list that includes Iran and North Korea.
At the moment, there are 23 countries on the gray listincluding Syria, South Sudan, Haiti and Uganda.
Also on the gray list are countries such as the United Arab Emirates (UAE) and the Philippines, but according to FATF, both countries have made a “high-level political commitment” to collaborate with the global financial watchdog. in order to strengthen its anti-money laundering and anti-terrorist financing regime.
Pakistan was also previously on the list, but after taking 34 steps to resolve FATF concerns, it is no longer subject to increased surveillance..
One of the anonymous sources quoted by Al Jazeera noted that while non-compliance with cryptocurrency AML guidelines will not automatically put a country on the FATF gray list, it could affect its overall rating, tipping some towards increased surveillance..
Cointelegraph has contacted the Financial Action Task Force for comment, but has not received a response as of press time.
In April 2022, The anti-money laundering watchdog reported that many countries, including those with virtual asset service providers (VASPs), do not comply with their regulations on combating the financing of terrorism (CFT) and the fight against money laundering.
According to FATF guidelines, virtual service providers operating in certain jurisdictions must be licensed or registered.
In March, the FATF found that several countries had “strategic deficiencies” in the fight against money laundering and the financing of terrorismincluding the United Arab Emirates, Malta, the Cayman Islands and the Philippines.
In October, Svetlana Martynovacoordinator of the fight against the financing of terrorism in the United Nations (UN), noted that cash and hawala have been the “predominant methods” of terrorist financing.
Nevertheless, Martynova also highlighted that technologies such as cryptocurrencies have been used to “create opportunities for abuse”.
“If they are excluded from the formal financial system and want to buy or invest in something anonymously, and they are advanced to do so, they are likely to abuse cryptocurrencies,” he said. during a UN “Special Meeting” on October 28.
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