FATF, which conducts financial studies on the prevention of money laundering, has published the expected crypto money report. The guide includes standards and clarifications on how industry’s regulatory framework, including DeFi and NFTs, should be met.
6 items underlined in the cryptocurrency report
The Financial Action Task Force (FATF) has completed its anti-money laundering report for cryptocurrencies, which it will re-update for DeFi and NFTs. In the FATF 2021 report, which includes 37 countries, including Turkey, it was stated that 6 main areas were focused on:
- Provide additional guidance on eliminating the risks of terrorism financing and money laundering in person-to-person transactions (P2P).
- Implementation of the standards in the FATF report on stablecoins.
- Clarity in defining cryptocurrencies VASPs
- Provide updated guidance for licensing and registration of VASPs
- Providing additional guidance for the implementation of the Travel Rule in the public and private sectors
- Ability to share information between VASP controllers
FATF sheds light on DeFi issues
The main issue with the final draft guidelines for the crypto market relates to Decentralized Finance (DeFi). Most of the guidelines fit perfectly for centralized exchanges and platforms but fail to provide much clarity on the Defi front. Thus, FATF has found a solution, instead of regulating protocols, it will hold the operators of Dex platforms and Dapss accountable and accountable. The board explains:
There may be control or sufficient influence over assets or aspects of the service protocol, and the existence of an ongoing business relationship between them and users, even if implemented through a smart contract or, in some cases, voting protocols. Countries may also want to consider other factors, such as whether any party profits from the service or has the ability to set or change parameters to determine the owner/operator of a DeFi arrangement.
cryptocoin.com Additionally, the FATF report states that NFTs do not fully meet the asset criteria. However, the report details that it can be considered a virtual asset.
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