A great number of cryptocurrency businesses are preparing for the upcoming Financial Action Task Force (FATF) rules toward cryptocurrencies, specifically the Travel Rule. This month 25 Virtual Asset Service Providers (VASPs) published a paper that outlines how American-based VASPs aim to comply with the FATF Travel Rule.
Digital currency companies, otherwise known as Virtual Asset Service Providers (VASPs) in the eyes of global regulators are concerned about regulation and compliance this year. In fact, in the recent report written by the Digital Currency Group (DCG), the survey’s findings indicate over 150 crypto executives said regulation is the top concern. Currently, a great number of crypto firms are drawing up plans in order to comply with the Travel Rule.
The ‘Travel Rule’ is a descriptive label for the Bank Secrecy Act (BSA) rule [31 CFR 103.33(g)]. Basically, the rule mandates that all companies that deal with finances have to pass on transmission data like KYC/AML to the next financial institution. “The funds’ transfer rules are designed to help law enforcement agencies detect, investigate and prosecute money laundering and other financial crimes by preserving an information trail about persons sending and receiving funds through funds transfer systems,” financial regulators explain.
Back in June 2019, FATF had published the “Interpretive Note to Recommendation 15,” which mandates that VASPs have to comply with the regulator’s Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) guidance. The recommendation from FATF concerning digital currency businesses also clarified that VASPs also must comply with the Travel Rule.
More recently, the Financial Action Task Force (FATF) published its FATF Plenary on June 30, 2020. The documents show that cryptocurrency businesses…