According to a new study, the cryptocurrency industry is keen to comply with the Financial Action Task Force’s (FATF) so-called Travel Rule. And is willing to engage with regulators to speed up the process.
With reference to a poll done by Notabene, a New York-based crypto compliance service, by Q2 2022, the majority of the crypto industry will be Travel Rule-compliant. According to the research, around 70% of respondents are either following the regulation or expecting to complete compliance in Q1/Q2 2022.
In the fight against money laundering and terrorism financing, the introduction of cryptocurrency has created a new dilemma. FATF has been watching this sector since 2014, with the goal of developing guidelines to handle these emerging threats. In order to stay up with the crypto sector’s rapid expansion, the FATF has continued to amend and clarify its anti-money laundering rules.
In transactions of $1,000 or more, virtual asset service providers (VASPs), financial institutions. As well as other regulated entities in member countries must provide counterparts with originator and beneficiary details. According to the FATF’s Recommendation 16 on wire transfers, also known as the Travel Rule.
Nearly one-third of businesses (31%) follow the rules entirely or partially
The survey received responses from 56 companies from around the world. With 45% situated in Asia Pacific, 30% in Europe, the Middle East, and Africa, and 25% in North America. A banking licence or being a bank is held by 13% of respondents, whereas 86% are crypto-native businesses.
According to the poll, nearly one-third of businesses (31%) follow the rules entirely or partially. According to the report, 92% of respondents have internal compliance and legal departments. And 78% of these organisations believe these departments are capable of ensuring the company follows external rules and internal controls.
The dawn time and legal uncertainty over the most relevant features of adoption, on the other hand, cited by half of the respondents as enforcement hurdles to Travel Rule compliance. According to the research, 46% of respondents stayed ignorant of the compliance protocol they planned to implement.
The FATF issued a set of guidelines in 2019. In order to prohibit cryptocurrencies from being used for money laundering and terrorism financing. Including the Travel Rule. Along with other Asian countries like South Korea and Singapore, Japan was one of the most welcoming jurisdictions to the Travel Rule order.