The Financial Action Task Force on Money Laundering (FATF) is preparing to introduce new rules to regulate the digital currency industry, which could seriously affect the work of cryptocurrency companies. It is reported by Bloomberg. A document with recommendations for regulators on preliminary information will be released on June 21. What exactly the rules will be presented by FATF is not yet known for certain. However, according to some reports, the recommendations will apply to all companies working with digital assets, including Coinbase and Fidelity Digital Assets. FATF allegedly wants to oblige them to identify users conducting transactions in excess of $ 1,000 or € 1,000.
According to analysts, the new rules from FATF may be too tough for the bitcoin industry.
“This is one of the most serious threats to the cryptocurrency industry. FATF recommendations can have a much greater impact on the industry than the rules of the SEC or other regulators, ”said Eric Turner, head of research for cryptocurrency at Messari, Messari.
At the same time, Turner noted that it is also important how regulators from different countries will interpret the presented rules. However, it can be assumed that the recommendations will still receive the support of regulators, since many of them are interested in developing such rules. For example, the authorities of many countries are already talking about the need to create regulatory standards for cryptoindustry – G20 countries have recently appealed to the Financial Stability Board to strengthen monitoring of the cryptocurrency market and develop measures to counter the risks associated with digital currencies.
Some predict that excessive FATF rigor will not promote market transparency, but quite the opposite – it may force many cryptocurrency companies to switch to the “black market”.
“The use of banking regulation in the cryptocurrency sphere may force market participants to conclude more transactions among themselves, and this will lead to a decrease in the overall level of transparency. FATF should consider the many undesirable consequences of applying its rules to service providers in the digital currency industry, ”Coinbase said.
It is also worth noting that the recommendations will not be so easy to implement in practice.
“We will need to either rework the blockchain technology at a fundamental level, or else create a global identification system that works with all cryptobirds in the world, and there are more than 200. You can imagine the complexity of such a system,” said Bittrex legal compliance director, John Roth.
At the same time, there are also those to whom the recommendations of the FATF seem to be a step towards attracting institutionalists to the market.
“Will it be difficult? Of course, at least in the beginning. However, despite this, it seems that such a step is necessary, ”analysts said Chainalysis, who recently called on FATF to refrain from over-tightening the regulation of the cryptocurrency industry.