How Does the Financial Action Task Force (FATF) Guidance Impact Crypto Exchanges?
FATF guidance requires Virtual Asset Service Providers (VASPs), including crypto exchanges, to implement robust Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) controls. The most impactful part is the "Travel Rule," which mandates VASPs collect and transmit identifying information about the originator and beneficiary of crypto transfers above a certain threshold.
This significantly increases compliance burden and requires new technological solutions.
Glossar
Financial Action Task Force
Compliance ⎊ The Financial Action Task Force (FATF) establishes international standards for combating money laundering and terrorist financing, increasingly relevant as cryptocurrency adoption expands and derivatives markets mature.
Virtual Asset Service Providers
Custody ⎊ Virtual Asset Service Providers, within the cryptocurrency and derivatives landscape, function as qualified custodians for digital assets, mitigating counterparty risk inherent in decentralized finance.