G20 Reiterates Commitment in Applying Tough FAFT Standards for Crypto Exchanges

https://g20.org

The G20 group of nations has reasserted it will keep up with standards for countering the funding of terrorism (CTF) and anti-money laundering (AML) set to be finalized by the Financial Action Task Force (FATF).

Central bank governors and finance ministers from the G20, who met in Fukuoka, Japan, over the weekend, stated their commitment to implementing the rules in a communiqué posted on Japanese Ministry of Finance’s website on June 9.

The FAFT standards are anticipated to set strict operating methods for cryptocurrency exchanges, going beyond the basic “know your customer” (KYC) regulations that many exchanges comply with already. Aside from keeping and verifying records of their users’ identities, exchanges and other service providers would have to share customer information when moving funds, just like banks’ protocol.

Blockchain analysis company Chainalysis recently contended that the planned changes, as stated in a draft document in February, would be harmful and unrealistic for the cryptocurrency industry.

However, G20 believes that the threat from crypto assets is low compared to its potential. The group stated in the communiqué:

“Technological innovations, including those underlying crypto-assets, can deliver significant benefits to the financial system and the broader economy. While crypto-assets do not pose a threat to global financial stability at this point, we remain vigilant to risks, including those related to consumer and investor protection, anti-money laundering (AML) and countering the financing of terrorism (CFT).” 

It is also looking for probable additional measures, urging the Financial Stability Board (FSB) and “other standard setting bodies to monitor risks and consider work on additional multilateral responses as needed.” The G20 embraced the FSB’s directory of crypto-asset regulators, published in April, and its research on continuing work, possible “gaps” in cryptocurrency regulation, and regulatory approaches.

Responding to prevalent hacks in the crypto space, the G20 said:

“We also continue to step up efforts to enhance cyber resilience, and welcome progress on the FSB’s initiative to identify effective practices for response to and recovery from cyber incidents.”