Global Regulatory Watchdog Updates Crypto Guidance for Governments, Targets DeFi and NFTs

A prominent global anti-money laundering (AML) agency called the Financial Action Task Force (FATF) is updating its guidance for the virtual asset sector.

In a document published Thursday, FATF detailed further regulation clarifications on six key crypto topics. These subjects include the definition of virtual assets (VA) and virtual asset service providers (VASPs), stablecoin guidance, peer-to-peer (P2P) risk mitigation, VASP registration and licensing, guidance on the “travel rule,” and information sharing amongst VASPs.

The guidance aims to further define what makes a VASP. In addition, the Updated Guidance for a Risk-Based Approach for Virtual Assets and Virtual Asset Service Providers includes,

“Updated guidance on how stablecoins, non-fungible tokens (NFTs), decentralized finance (DeFi) and decentralized or distributed applications (DApp) and multisignature arrangements relate to the FATF Standards.”

The guidance outlines how countries should implement the “travel rule” in crypto assets. The travel rule recommends that governments force exchanges, banks, over-the-counter (OTC) desks, and hosted wallets to share identifying information about people involved in crypto transactions worth more than $10,000.

According to FATF president Marcus Pleyer, the new guidance updates previous policies and strategies.

“[It] builds on our guidance that we issued in 2019 to explain how the FATF recommendations apply to virtual assets and their service providers, and in particular the guidance clarifies the definitions of virtual assets and VASPs.

It explains how the FATF standards apply to stablecoins, and it addresses the risk for peer-to-peer transactions and illustrates tools to identify and mitigate these risks.”

The original guidelines were released in 2019.

   
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