Wednesday, October 27, 2021

New FATF’s rule asks crypto exchanges to expose users

The Takeaway:

FATF's new guidelines related to crypto exchanges are privacy threatening. The new rule suggests that crypto exchanges must reveal the customers' data to the other exchanges when a transaction is equal to or above $1,000. This law is proposed to combat money laundering and terror financing.

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Financial Action Task Force proposed a rule that would force crypto exchanges to share your information with other financial institutes. Under FATF guidelines, crypto firms must reveal customer data to institutions receiving transfers when a transaction is above or equal to $1000.

FTAF works to combat money laundering, terror financing, and other financial related crimes. This intergovernmental organization in June proposed a finalized recommendations on regulating cryptocurrencies for its 37 member countries.

If implemented, this law would potentially end the privacy that crypto users enjoy. This law is aimed to bring crypto exchanges under the same category as traditional financial institutes to keep track of illicit activities. 

One of the most important features about dealing in cryptocurrencies is the privacy that it provides. This proposed law defeats the whole purpose of trading in cryptocurrencies. 

The chief compliance officer at the Coinbase, Jeff Horowitz said that crypto exchanges have no infrastructure to comply with this FAT’s travel rule. However, he stated that Coinbase would work to make the exchange FATF-compliant. 

The global financial watchdog has the right to ban any of the 37 countries from accessing the global financial system if they are found violating its rules. This guideline has the potential to slow down the crypto market to some extent but not entirely. Let us know in comments what do you think about this new FATF guideline?

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Disclaimer: The article reflects the opinions of the author and is not representative of Chaintimes’ views.
The article does not offer any investment advice. User discretion is advised when investing in or trading with cryptocurrency. Extensive and diligent research should be carried out by the reader before making a decision.

Thomas Allums
Thomas Allums
Although Thomas is an experienced writer, he is also a passionate musician who loves to travel often. He is based in New York and loves to spread the word about decentralization throughout his neighborhood.

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