The AML Environment of Crypto and Blockchain
Since 2014, the Financial Action Task Force (FATF) has been warning about the risks of virtual currencies (Bitcoin) in connection with money laundering (ML) and terrorist financing (TF). Since then, the FATF has adapted its recommendations several times and published a large number of publications on virtual assets. The EU has implemented the FATF recommendations with the 5th Anti Money Laundering Directive and regulates virtual currencies and their service providers (VASP).
Virtual Currencies vs. Virtual Assets
The FATF and the international community originally only had Bitcoin and thus virtual currencies on their radar. However, this has now changed. The crypto market has evolved and now virtual assets (crypto assets) and crypto asset service providers are to be regulated.
The Future Regulation of Virtual Assets (Crypto Assets)
The FATF continues to make recommendations on virtual assets. The aim is to examine annually what the international community can improve in order to better manage the ML and TF risks of virtual assets and VASPs. In particular, the focus is on the so-called Travel Rule. At the European level, the European Commission is endeavouring to create a uniform EU regulatory framework with the Markets in Crypto Assets Regulation (MiCAR). In the future, this should directly regulate the issuance and distribution of all crypto assets for all EU member states.
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More on Nathan Catania and XReg Consulting
Nathan is a Partner at XReg Consulting He has hands-on experience in public policy formulation and regulatory proposal development for blockchain, distributed ledger technology (DLT), and crypto assets. Nathan was with the DLT team at the Gibraltar Financial Services Commission (GFSC), where he was primarily responsible for reviewing regulated firms’ compliance with financial resource requirements and safeguarding client assets. Nathan was active in developing internal regulatory policies and procedures that addressed technical and emerging aspects of the DLT industry. During his time at GFSC, Nathan built his technical knowledge in DLT and earned a Blockchain Expert Certification from the Frankfurt School of Finance & Management.
XReg Consulting is a consulting firm specializing in crypto assets regulatory consulting. XReg’s founding partners are all former regulators with years of practical experience in strategy and policy development in the financial services and crypto assets environment.
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