In a renewed call from the Financial Action Task Force, countries were urged to implement the “travel rule” to combat cryptocurrency-enabled money laundering and terrorist financing activities.
On June 23, the United Nations body tasked with promoting policies to combat money laundering and terrorist financing said “many” member states have not implemented the rule.
The call follows a series of FATF meetings at their headquarters in Paris.
FATF said that “more than half” of respondents to a survey said they had taken no action to implement the rule:
“More than half of survey respondents have not taken steps to implement the travel rule, a key FATF requirement to prevent funds from being transferred to sanctioned individuals or organizations.”
The FATF urged countries to “immediately” implement anti-money laundering and counter-terrorist financing measures in crypto-related activities to prevent “criminals” from exploiting “significant loopholes” not protected by regulations.
A March 2022 survey by the FAFT found that at that time only 29 out of 98 jurisdictions met the requirements required under the travel rules and a small subset of those jurisdictions had begun enforcement.
The FAFT travel rule was introduced to ensure the anonymity of illegal cryptocurrency transactions. It was launched in June 2019 and last updated in June 2022. A further update to the rules was agreed by FATF members at the meetings.
FAFT said it would release a report on June 27 urging member countries to implement its recommendations to close the loopholes criminals are said to be trying to exploit.
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The report mentions North Korea’s illegal activities with virtual assets, with stolen funds allegedly going towards its weapons of mass destruction program, FAFT said.
Illicit activities of other “emerging risks” such as stablecoins, decentralized finance, non-fungible tokens and peer-to-peer transactions would also be discussed in the report, he added.
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