Bitcoin has continued with its stellar run as no resistance level has been able to hold it back. An intergovernmental organization combating money laundering and terrorism financing has finalized its recommendations on regulating cryptocurrencies for its 37 member countries.
As expected, the Financial Action Task Force (FATF) standards release includes a controversial requirement that “virtual asset service providers” (VASPs), including crypto exchanges, pass information about their customers to one another when transferring funds between firms.
The final recommendation makes official the contentious part of FATF’s February proposal, saying countries should make sure that when crypto businesses send money, they:
“… obtain and hold required and accurate originator [sender] information and required beneficiary [receipient] information and submit the information to beneficiary institutions … if any. Further, countries should ensure that beneficiary institutions … obtain and hold required (not necessarily accurate) originator information and required and accurate beneficiary information …”
Under the new guidance, the required information for each transfer includes:
(i) originator’s name (i.e., the sending customer);
(ii) originator’s account number where such an account is used to process the transaction (e.g., the VA wallet);
(iii) originator’s physical (geographical) address, or national identity number, or customer identification number (i.e., not a transaction number) that uniquely identifies the originator to the ordering institution, or date and place of birth;
(iv) beneficiary’s name; and
(v) beneficiary account number where such an account is used to process the transaction (e.g., the VA wallet).
Calling the “threat of criminal and terrorist misuse of virtual assets” a “serious and urgent” issue, FATF said in a public statement that it will give countries 12 months to adopt the guidelines, with a review set for June 2020.
The so-called travel rule is a longstanding requirement for international banks when sending each other money on customers’ behalf. But blockchain industry advocates argued it would be onerous if not impossibleto put into practice with crypto, harmful to user privacy, and counter-productive to law enforcement goals.
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