Financial Crime World

Updated Guidance: A Risk-Based Approach to Virtual Assets and Virtual Asset Service Providers

The Financial Action Task Force (FATF) has released an updated report titled “Updated Guidance: A Risk-Based Approach to Virtual Assets and Virtual Asset Service Providers”. This guidance provides clarity on the application of anti-money laundering (AML) and combating the financing of terrorism (CFT) measures to virtual assets (VAs) and virtual asset service providers (VASPs).

Key Points from the Report

Purpose and Scope

  • Purpose: The updated Guidance expands on the 2015 VC Guidance and provides additional clarity on the application of the Risk-Based Approach (RBA) to AML/CFT measures for VAs.
  • Scope: The Guidance applies to all jurisdictions, including financial institutions, designated non-financial businesses and professions (DNFBPs), and VASPs.

Definitions and Clarity

  • Definitions: The report clarifies the definitions of VA and VASP, emphasizing that these definitions are expansive and should not be limited to specific types of assets or services.
  • Stablecoins: The Guidance provides guidance on how to apply AML/CFT measures to stablecoins, which are considered a type of VA.

Risk Assessment and Tools

  • Risks and Tools: The report highlights the ML/TF risks associated with VAs and provides guidance on the tools available to countries to address these risks.
  • Licensing and Registration: The Guidance updates the requirements for licensing and registration of VASPs.

Information-Sharing and Cooperation

  • Travel Rule: The report provides additional guidance on the implementation of the “travel rule”, which requires VASPs to report transactions involving certain types of assets.
  • Principles of Information-Sharing and Cooperation: The Guidance includes principles for information-sharing and cooperation among VASP supervisors.

Conclusion

The updated Guidance aims to provide a comprehensive framework for countries to implement effective AML/CFT measures for VAs and VASPs, while also promoting international cooperation and information-sharing.