Haiti’s Cryptocurrency Laundering Concerns: Global Watchdog Warns of Greylisting
The Financial Action Task Force (FATF) has warned Haiti that its failure to implement anti-money laundering guidelines for cryptocurrencies could lead to its addition to a “grey list”. This move has sparked fears of financial exclusion and economic instability, as governments may enact blanket bans on crypto service providers or pressure banks to cease servicing platforms to avoid an FATF listing.
Annual Checks and Consequences
The FATF is planning to conduct annual checks on countries’ compliance with anti-money laundering and terrorist financing rules on crypto providers operating in their jurisdiction. This move has raised concerns among cryptocurrency industry leaders that governments may:
- Enact blanket bans on crypto service providers
- Pressure banks to cease servicing platforms
- Avoid an FATF listing, which could lead to significant reputational damage, disrupting investment flows and access to the global financial system
Industry Concerns
According to Ron Tucker, cofounder of the International Digital Asset Exchange Association (IDAXA), a crypto industry representative body:
- There is a real risk that shutting down this new asset class will set back those in developing countries without access to banking as well as younger generations in developed countries
- Implementing FATF guidelines into regulation could promote financial inclusion rather than exclusion
Proposed Policy Framework
IDAXA is preparing to unveil a set of proposals at the G20 leaders’ summit in Bali this month aimed at minimising the potential fallout for cryptocurrency users and exchanges. The proposed policy framework seeks to:
- Improve on elements outlined at the previous V20 in Osaka in 2019
- Allow countries to better enforce FATF guidelines
Implications for Haiti
Haiti, already listed alongside Syria on the FATF’s “grey list” due to concerns over its lack of anti-money laundering regulations, could face further scrutiny and potentially even blacklisting if it fails to address these concerns. The implications are severe, with financial exclusion and economic instability a real possibility for the country and its citizens.
Next Steps
As the V20 conference approaches, IDAXA members will meet with the FATF and finance officials to discuss the proposed policy framework and seek ratification. Industry leaders hope that this will be a chance to turn things around and ensure that cryptocurrencies are regulated in a way that promotes financial inclusion rather than exclusion.