The pursuit to regulate the activities of businesses operating in the cryptocurrency industry has intensified with Bloomberg reporting today that the Financial Action Task Force (FATF) plans to release a guidance note later this month.
According to the report, the upcoming guidance note is set to impose on crypto exchanges, hedge funds, and custodians, requirements similar to what is obtainable within the banking industry.
Bloomberg claimed that the confirmation was made by FATF spokeswoman Alexandra Wijmenga-Daniel who noted the operators mentioned earlier would have to collect information from customers who transact over $1000 or €1000.
Additionally, the sender would provide information regarding the recipient of the transaction, as this would be sent along with the funds to the service provider used by the recipient.
Regarding the scope of jurisdictions expected to adopt the regulations, the reports note that the FATF currently provides anti-money laundering and counter-terrorism financing (AML/CFT) laws used in over 200 countries.
On that basis, the numbers of countries likely to implement the regulations would be on a high, although they will reserve the power to make a few adjustments before rolling it out in their respective jurisdictions.
Crypto Industry Participants React to Proposed FATF Laws
Speaking in the report, some crypto industry participants voiced concerns regarding the high costs it would require to reach such regulatory compliance, as well as how such rules go against the basic principles of blockchain technology.
Jeff Horowitz, Chief Compliance Officer at U.S based crypto exchange Coinbase noted,
“Applying bank regulations to this industry could drive more people to conduct person-to-person transactions, which would result in less transparency for law enforcement.”
John Roth, Chief Compliance Officer at another crypto exchange, Bittrex for his part suggested that reaching such a high level of compliance would either “require a complete and fundamental restructuring of blockchain technology, or it’s going to require a global parallel system to be sort of constructed among the 200 or so exchanges in the world.”
Meanwhile, it is essential to remember that the rules by the FATF is still a proposal and could come under some changes before the final rollout, although G20 Finance Ministers and Central Bank Governors earlier this week pledged support for the upcoming rules.