A few days ago the Financial Action Task Force (FATF) released their regulatory guidance on crypto-assets and “Virtual Asset Service Providers” (VASPs). Although government implementation of these new laws is yet to be implemented, it is an important step towards the maturity and adoption of cryptocurrencies.
Ripple, a company looking to take over the current cross-border transfer system, SWIFT, has been known within the space to “preach” compliance to laws and regulations. In fact, Ripple’s CEO, Brad Garlinghouse, favours more regulations for crypto-assets as it will help with maturity. Recently, after the FATF’s announcement, Ripple signed a deal with a regulation technology startup called Coinfirm to help XRP comply with the regulations.
Although the FATF’s guidance paper requires the originator and beneficiary addresses, names and identification papers, Coinfirm will not be able to fully comply with these requirements as this information is out of their control. Nonetheless, they will provide information on whether or not the crypto-asset was processed by a “mixer” to launder funds. Moreover, whether the address used is owned by an exchange that allows anonymous trading or not, will also be among the information included.
The FATF’s guidance was not followed to the letter by Coinfirm but according to their CEO, Pawel Kuskowski, “We argue with FATF that this is completely sufficient, and effectively it is sufficient”. The FATF’s guidance is not an obligation. However, governments around the world have a year to implement them or face being blacklisted.
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