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FATF: International Crypto AML Framework is Lacking

Too many countries lack legal frameworks to fight the use of cryptocurrency in money laundering or terrorist funding, according to a Paris-based intergovernmental group that promotes such standards, the Wall Street Journal reported.

The Financial Action Task Force (FATF) said that of the 98 jurisdictions that responded to a survey, 29 reported they had passed relevant rules, and only 11 of those 29 were enforcing those regulations, called “travel rules.”

Another quarter of respondents are working on such rules, and a third haven’t even started the process of formally introducing travel rules, according to FATFA.

“There are now technological solutions available to facilitate Travel Rule compliance in practice, but (the) private sector need[s] to continue to increase interoperability between solutions and across jurisdictions, and to work towards full compliance,” the FATF wrote.

In addition, FATF said it would continue to monitor emerging risks within the sector, including the use of crypto to evade sanctions and to collect ransomware payments anonymously.

Singapore recently took over the rotating presidency of FATF. Laying out priorities for the next two years, the new Singaporean president of the organization, T. Raja Kumar, said Friday (July 1): “Online fraud, scams, ransomware and COVID-related phishing activities have dominated the cyber-enabled crime landscape since 2020. Left unchecked, they will only grow in sophistication and pose a greater threat and risk as more crime syndicates and organized crime groups engage in this illicit activity.”

FATF said broad guidelines that constitute proposals for regulation to member countries.

Read more: PYMNTS Crypto Basics Series: Is Bitcoin Really Anonymous and How Can Law Enforcement Track It?

Meanwhile, private-sector companies and government sleuths are getting better at tracking crypto transactions, as a growing number of financial criminals are learning.

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