Another day, another regulatory hurdle, another headache and, of course, increased costs.
Today, June 21 (happy summer), the Financial Action Task Force is scheduled to release a brief to clarify how participating countries should oversee virtual assets/crypto. By the way, the FATF is a multi-government committee that comes up with recommendations for combating money laundering and financing global terrorism. It includes around 200 countries including the U.S. These new rule recommendations are to include businesses working with tokens and cryptocurrencies WHICH INCLUDE exchanges, custodians and crypto hedge funds.
Today's scheduled report with its recommendations may actually have a much bigger impact than the SEC (or other regulators) have had up to now. It appears that the impact of the new oversight will basically make exchanges, asset managers, etc. follow rules generally applied to traditional banks. Additionally it will not be simple, nor even feasible, which means lots of new costs and delays in implementation. Any wonder why Facebook (and others) set up in Switzerland and more firms will be moving "offshore?" More details below.
Bill Taylor/ Fintek Capital
Bitcoin and its fellow cryptocurrencies have surged in popularity partly because they’ve offered a way to skirt the government oversight exercised over traditional financial systems. Well, get ready to kiss much of that autonomy goodbye.
On June 21, the Financial Action Task Force -- a multi-government effort that develops recommendations for combating money laundering and financing of terrorism that’s followed by about 200 countries including the U.S. -- will publish a note to clarify how participating nations should oversee virtual assets, FATF spokeswoman Alexandra Wijmenga-Daniel said in an email. The new rules will apply to businesses working with tokens and cryptocurrencies, such as exchanges and custodians and crypto hedge funds.
Much depends on how the rules -- long governing traditional bank wire transfers -- will be interpreted and applied by country-specific regulators, but they are “one of the biggest threats to crypto today,” Eric Turner, director of research at crypto researcher Messari Inc., said in an email. “Their recommendation could have a much larger impact than the SEC or any other regulator has had to date.”...
Full Story at Bloomberg