The Financial Action Task Force (FATF) has issued a renewed call for countries to quickly put in place the “travel rule” to fight against money laundering and terrorism financing enabled by cryptocurrencies. The United Nations body – whose mission is to promote strategies to combat such illegal activities – pointed out that “many” of its member states have failed to do so.
This call followed a series of FATF meetings held in its Paris headquarters. According to the findings of a survey conducted by FATF, more than half of the respondents said they had not taken any action to implement the rule. The statement said: “More than half of survey respondents have not taken any steps towards implementing the Travel Rule, a key FATF requirement to prevent funds being transferred to sanctioned individuals or entities.”
FATF strongly urged countries to swiftly implement Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) regulations regarding crypto-related activities in order to prevent “criminals” from taking advantage of “significant loopholes” that are not covered by the law. A survey conducted in March 2022 revealed that only 29 out of 98 jurisdictions had met the requirements of the travel rule, and only a small subset of those had started enforcement.
The FAFT travel rule, which was first introduced in June 2019 and last updated in June 2022, targets the anonymity of illicit cryptocurrency transactions. The FATF members agreed to update the rules during their meetings. A report, to be published on June 27, will urge member countries to implement FATF’s recommendations in order to close the loopholes that are being exploited by criminals. It will also mention North Korea’s illicit virtual asset activities, such as the stolen funds that are allegedly being funneled into its Weapons of Mass Destruction program. The report will also discuss other emerging risks related to stablecoins, decentralized finance, non-fungible tokens (NFTs) and peer-to-peer transactions.
