FATF Announcement of New International Standards for Virtual Asset Regulations (19’06)
Cryptocurrency has become the subject of legal regulation.
On June 21, 2019, the FATF finalized its regulations regarding virtual assets at the request of the UN Security Council, the G20 Summit and the Finance Ministers’ Meeting. It has clear definitions and regulations for cryptocurrency. Let’s take a look at the highlights!
1.Obligation to implement preventive measures
•Imposing a duty to prevent money laundering, equivalent to a financial company, to a virtual asset service provider
•Perform customer verification, suspicious transaction report, etc. called KYC or CDD
•In case of a virtual asset transfer, all remittance/receiver related information shall be collected and retained by the organization, as applied to existing financial institutions
•Provide relevant information to the authorities if necessary
1-1. Confirmation of Cryptocurrency Exchanges
1.Name of originator
2.Information of the account accessed by the originator to process the transaction (e.g. cryptocurrency wallet address)
3.Documents that can prove the identity of the originator, such as the physical address, resident registration number of the originator (including date of birth), business registration number (regardless of transaction approval number).
4.Name of recipient
5.Information of the account that the recipient accessed to process the transaction (e.g. cryptocurrency wallet address)
2. Report and Registration System for Exchanges
The virtual asset service providers (such as cryptocurrency exchanges) must obtain permission from the regulatory authorities or report/register. If you have a criminal record, you will be restricted from entering the virtual asset-related service sector, and unreported operations will be subject to sanctions.
3. Regulations and supervision regarding AML
Financial authorities are required to supervise the virtual asset service providers. At the financial authorities’ decision, virtual asset service providers that violate their obligations may be denied permission/report or may be subject to various sanctions.
1.Exchanges continue to appeal the difficulties of obtaining a recipient’s address
2.When to apply to domestic laws (the revision to the Special Act has already been proposed, but there is no mention on identification of all parties involved in the transaction)
3.FATF is scheduled to check the implementation status of international standards one year later (impacting national creditworthiness according to the implementation of international standards)
4.Problems of setting the threshold amount of a risk-based approach
ARGOS has been advising customers to collect wallet addresses for months. It was only a natural interpretation when we applied the existing rules. Work with ARGOS, a world-class expert in international anti-money laundering regulations :]
In need for KYC•AML? ARGOS is with you.