The Financial Action Task Force on Money Laundering (FATF) has come up with a new rule, which will require cryptocurrency businesses in more than 200 counties to perform an identity check on anyone who will be sending more than $1,000 worth in digital assets. This will, therefore, put an end to the pseudonymity. Several US-based firms have responded to the idea of sharing the data of different cryptocurrency exchanges across the world to stay compliant. This might eventually have hedge funds and several investment firms who are focusing on investment in digital assets to experience a lot of delay and increased costs for making cryptocurrency transactions. The industry insiders are concerned about an increase in compliance costs, and this can make things unsustainable for businesses eventually having them shut down business altogether. When additional costs are taken into consideration, the new FATF rules will likely hurt the smaller and medium-sized enterprises, as these businesses might not have the resources to execute the new legal requisites put forth for them to comply. Those services which provide money transmission services will have to deal with closer scrutiny from the government. If they are caught not working in compliance with the FATF rules, they might lose their business altogether. The issue can even hurt countries. Several government agencies will be working to ensure legal compliance to the terms proposed by their respective jurisdictions. Nations who do not operate in accordance might land up on the blacklist. In a recent summit in Japan, the G20 finance ministers and the central bank publically took a pledge that they will be committed to the incoming guidelines of the mountain. Any company which has been forcing AML and KYC guidelines on the customer were criticized for deviating from the original purpose; however, with the passing of time and the stepping in of regulators, it seems like there will be no choice in the matter. The Indian blockchain firms are already worried following the move by the regulators to ban “cryptocurrency dealing of any kind in India altogether,” and this also means anyone breaching the rule will face imprisonment. While all of these seems scary and unsure, it is just a sign that the cryptocurrency is taking shape and regulators are molding the features of the cryptocurrency market in public interest. Several companies are lobbying the cryptocurrency space, and several others are already into the cryptocurrency business. The crypto world is evolving.
Richard is the Editor-in-chief of Bitcoin Journal. He has over 10 years of experience with the news industry mainly handling the editorial cycle.
May 27, 2019
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