Governments Begin to Roll Out FATF's Travel Rule Around the Globe

Published on by Cointele | Published on

The FATF - an intergovernmental organization tasked with combating money laundering - found itself at the center of controversy last June after issuing its latest crypto guidance.

The United States: Ahead of the curveThe U.S. is charged with the conception of the FATF guidance after basing the directives on the Bank Secrecy Act - the country's primary Anti-Money Laundering law.

Switzerland takes on the travel ruleAs recently reported by Cointelegraph, one of the latest countries to enforce FATF guidance is Switzerland.

Falling in line with the FATF's travel rule threshold, the new Financial Services Act aims to address the "Heightened money-laundering risks" within the crypto market.

It's plausible that Switzerland is merely complying to EU standardization, especially in the wake of the recently imposed Fifth Money Laundering Directive, or 5AMLD.The EU's interpretation of FATF directivesThe EU's Fifth Anti-Money Laundering Directive came into force on Jan. 10 and seems to mostly correspond to the FATF guidance.

Alongside the standard AML practices, including those derived from 5AMLD, the FCA necessitated all crypto firms to undertake "Ongoing monitoring of all customers" - a definitive nod to FATF compliance.

FATF impact around the worldJapan, South Korea and Singapore have been exceptionally receptive to FATF directives.

In line with FATF guidance, Singapore set its travel rule threshold at around $1000.

What action is being taken by crypto platforms?Judging by the sheer volume of travel rule violations, it seems few crypto firms have actually heeded FATF guidance, regardless of the jurisdictional implementation.

The impact on privacy coinsStill, one crucial question remains: Do the FATF directives pose a risk to privacy coins? Following the FATF guidance, exchanges such as Coinbase and OKEx started booting privacy coins in an effort to comply.