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Friday, June 28, 2019

Global Cryptocurrency Regulation Slated to Begin

Had a conversation with a US  Inspector General recently and he expressed how his colleagues were concerned about the use of cryptocurrencies to launder money and related uses, I mentioned that there was work underway to regulate them. Now finally a first step in this direction.  What are the implications for connected technologies?   See also comments in the current MIT Chain Letter.

All Global Crypto Exchanges Must Now Share Customer Data, FATF Rules   By Anna Baydakova , Nikhilesh De ,  in CoinDesk

A powerful intergovernmental organization devoted to combating money laundering and terrorism financing has finalized its recommendations on regulating cryptocurrencies for its 37 member countries.

As expected, the Financial Action Task Force (FATF) standards released Friday include a controversial requirement that “virtual asset service providers” (VASPs), including crypto exchanges, pass information about their customers to one another when transferring funds between firms.

The final recommendation makes official the contentious part of FATF’s February proposal, saying countries should make sure that when crypto businesses send money, they:

“… obtain and hold required and accurate originator [sender] information and required beneficiary [receipient] information and submit the information to beneficiary institutions … if any. Further, countries should ensure that beneficiary institutions … obtain and hold required (not necessarily accurate) originator information and required and accurate beneficiary information …”

Under the new guidance, the required information for each transfer includes:

(i) originator’s name (i.e., the sending customer);
(ii) originator’s account number where such an account is used to process the transaction (e.g., the VA wallet);
(iii) originator’s physical (geographical) address, or national identity number, or customer identification number (i.e., not a transaction number) that uniquely identifies the originator to the ordering institution, or date and place of birth;
(iv) beneficiary’s name; and
(v) beneficiary account number where such an account is used to process the transaction (e.g., the VA wallet).

Calling the “threat of criminal and terrorist misuse of virtual assets” a “serious and urgent” issue, FATF said in a public statement that it will give countries 12 months to adopt the guidelines, with a review set for June 2020.  .... "  (more at link)

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