On 21 June, the Financial Action Task Force (FATF) adopted and issued an interpretive note to recommendation 15 on new technologies (INR. 15) that further clarifies the FATF’s previous amendments to the international standards relating to virtual assets and describes how countries and obliged entities must comply with the relevant FATF recommendations to prevent the misuse of virtual assets for money laundering and terrorist financing.
The obligations require countries to assess and mitigate their risks associated with virtual asset activities and service providers; license or register service providers and subject them to supervision or monitoring by competent national authorities (notably, countries will not be permitted to rely on a self-regulatory body for supervision or monitoring); implement sanctions and other enforcement measures when service providers fail to comply with their AML/CFT obligations; and underscore the importance of international cooperation.
FATF will continue to take steps to ensure the effective regulation and supervision of how new technologies are used, including in the context of virtual assets, in order to mitigate the associated money laundering and terrorist financing risks and support responsible innovation across the financial services sector.
The public statement can be found here.
FATF’s guidance for a risk-based approach to virtual assets and virtual asset service providers can be found here.