The Financial Action Task Force (FATF) has a plenary meeting scheduled for June 24th to assess the progress of the implementation of the travel rule by Virtual Assets Service Providers (VASPs) worldwide.
According to Pawel Kuskowski in Forbes, the FATF meeting will be held in virtually two weeks to discuss the organization’s guidelines, which are intended to ensure that VASPs comply with anti-money laundering (AML) and anti-terrorist financing (ATF) regulations. He says that FATF member jurisdictions „must demonstrate progress“ in implementing the travel rule, as their efforts will be reviewed at the June 24th meeting.
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Background to the travel rule
In June 2019, the FATF asked global regulators to adopt its AML guidelines. For cryptomonies, these guidelines became known as „the travel rule“ and provide a series of AML and ATF measures for exchanges to prevent cryptomonies from being used illegally.
The FATF said it would „monitor the implementation of the new requirements by countries and service providers and conduct a 12-month review in June 2020,“ giving the crypto currency community a year to catch up.
As Cointelegraph has reported, the guidelines are not legally binding, however, they can be effective; any nation that does not comply with them by the deadline can be excluded from the global financial network.
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Only 10% of the countries comply
Cointelegraph spoke with CoolBitX CEO Michael Ou, whose company is developing technology specifically to meet the travel rule.
According to Ou, of the more than 200 countries that make up the FATF, „only about 20 have issued regulations covering the travel rule,“ however, the CEO said, the remaining countries are making „significant progress“ that will be discussed at the meeting scheduled for June 24.
Ou hopes that the plenary meeting is likely to be held so that the FATF simply repeats its expectations for member countries on these guidelines, „this will cause more VASPs to work towards a defined deadline in each jurisdiction in order to comply with them,“ the CEO said.
„At present, there are only a small handful of VASPs that meet the guidelines,“ Ou said, but he said he expected that number „to increase exponentially before the end of the year.
Others in the industry do not see that happening soon. XReg Consultant Siân Jones argued that it could take „a matter of years“ for all participating nations to implement the travel rule guidelines.
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„The problem of the dawn“
In addition to complying with the same guidelines, VASPs in participating countries have to deal with the fact that the travel rule will come into effect at different times in different countries, according to Ou, each jurisdiction may interpret the guidelines differently.
„There are several travel rule solutions currently in the market, each of which requires due diligence and enforcement,“ Ou said, „if left to it later, exchanges will find themselves racing against the clock.
CoolBitx developed its own solution for the FATF guidelines called, Sygna Bridge, which went live in April, the solution allows exchanges to communicate the identities of the senders and receivers of each transaction.