The Financial Action Task Force (FATF), a worldwide standard-setter, stated that authorities must fast-track identification checks of crypto users. The FATF study highlights that only 11 of the 98 jurisdictions examined are enforcing and monitoring the contentious “travel rule”.
FATF proposed in 2018 and revised in 2019 that cryptocurrency service providers must confirm the identity of their clients.
Although many in the sector have protested that it violates privacy and is not well suited for payments taking place on a transparent blockchain, the identification checks are intended to help authorities track criminal funds, much as they do in the conventional financial system.
According to a March 2022 survey, about one-third of the nations expected to enact laws have not even started a bill, while a quarter are already doing so.
“Countries that have not introduced Travel Rule legislation should do so as soon as possible, and FATF jurisdictions should lead by example,” the report stated.
The U.S., U.K., Germany, and China are among the 39 direct members of FATF, but it is also in charge of observing activity in smaller nations like Bermuda and Cyprus.
Earlier this month it was revealed that FATF was going to release targeted updates on virtual assets & VASPs.
