To understand the implications of these refurbished guidelines, one needs to understand the role of the FATF and its involvement in the regulation of cryptocurrencies.
FATF and crypto
Established in 1989, by the G7, the FATF is responsible for creating legal, regulatory, and operational measures to prevent money laundering in Europe and around the world. Since its inception, the FATF has created a number of recommendations that are regarded as the international standard for fighting money laundering and the financing of criminal activities.
A massive surge of investors looking to gain exposure by trading cryptocurrencies on exchanges across the world, has led to governments and financial regulatory bodies having to provide clear legal frameworks and guidelines for those operating in the space.
Naturally, this has taken on different shapes and forms in different regions of the globe. We’ve seen hardline, no-to-crypto stances from countries like China, while a nation like Malta has adopted a pro-crypto attitude that could well make it a leading destination for crypto and blockchain-related businesses to thrive.
Within that vein, the FATF organisation released a “risk-based-approach” guideline for cryptocurrencies in 2015, which aimed to help countries develop regulatory processes to manage the potential risk of cryptocurrencies being used for money-laundering and terror-financing.