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Targeted Update of FATF Standards on Virtual Assets

On 27th June, the Financial Action Task Force (FATF) published the Targeted Update on Implementation of the FATF standards on

Virtual Assets (VAs) and Virtual Asset Service Providers (VASPs) - see link in comments.

The purpose of the report is to:

๐Ÿ‘‰ highlight the global implementation and compliance with anti-money laundering and counter-terrorist financing (AML/CFT) regulations for VAs, and

๐Ÿ‘‰ emphasize the risks associated with illicit activities and the need for stronger measures to address them.

Here are ๐™จ๐™ค๐™ข๐™š ๐™ž๐™ฃ๐™ฉ๐™š๐™ง๐™š๐™จ๐™ฉ๐™ž๐™ฃ๐™œ ๐™ฃ๐™ช๐™ข๐™—๐™š๐™ง๐™จ of the report according to the FATF survey conducted in 2023:

๐ŸŒ Number of jurisdictions assessed (mutual evaluations): 98

๐ŸŒ Jurisdictions partially or not compliant with FATF's requirements: 73 (75%)

๐ŸŒ Jurisdictions that have not conducted a risk assessment: 52 out of 151 respondents (34%)

๐ŸŒ Jurisdictions not yet decided on regulating the VASP sector: 45 out of 151 respondents (30%)

๐ŸŒ Jurisdictions permitting VAs and VASPs: 90 out of 151 respondents (60%)

๐ŸŒ Jurisdictions prohibiting VASPs: 16 out of 151 respondents (11%)

๐ŸŒ Jurisdictions that have passed legislation or regulation to implement the Travel Rule: 58

๐ŸŒ Jurisdictions not taking steps towards Travel Rule implementation: More than half of the survey respondents (73 out of 135, excluding those that prohibit VASPs)

๐ŸŒ Jurisdictions assessing VAs/VASPs as high risk and not implementing the Travel Rule: 25 out of 38 respondents (66%)

๐ŸŒ Jurisdictions issuing findings or directives or taking enforcement actions against VASPs focused on Travel Rule compliance: 13 out of 62 respondents (21%)

โŒ Amount of stolen VAs since 2017: ๐™๐™Ž๐˜ฟ ๐Ÿญ.๐Ÿฎ ๐™—๐™ž๐™ก๐™ก๐™ž๐™ค๐™ฃ (including VAs stolen from DeFi arrangements) ๐Ÿ˜ฎ

Limited number of jurisdictions have made progress in improving interoperability between Travel Rule compliance tools.

The FATF urges countries to implement following measures:

๐Ÿšจ Risk assessment and application of a risk-based approach for VAs and VASPs

๐Ÿšจ Licensing/Registration of VASPs

๐Ÿšจ Identification of natural persons or legal entities that conduct VASP activities

๐Ÿšจ Supervision/Regulation of VASPs to ensure AML/CFT compliance

๐Ÿšจ Establishment of guidelines which assist VASPs in AML/CFT compliance

๐Ÿšจ Sanctions compliance

๐Ÿšจ Preventative AML/CFT measures including the Travel Rule

๐Ÿšจ Targeted Financial Sanctions compliance

๐Ÿšจ International cooperation

You can download the report here.


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