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FATF Reveals Qatar’s Failure to Enforce Crypto Ban to Combat Money Laundering

Richard M. JUNE 2, 2023 1 minute read

Qatari authorities have taken naive action against crypto companies that violated a ban announced in 2019, according to a report released on March 31st by the global anti-money laundering watchdog, FATF.

A report by the Financial Action Task Force (FATF) suggests that Qatar Central Bank (QCB) has been accused of raising funds for terrorist activity in a particularly lax manner, so proactive measures should be taken to identify and sanction virtual asset service providers (VASPs) that violate its crypto prohibition.

“Qatar has not demonstrated that the competent authorities proactively identify and take enforcement action for potential breaches of this prohibition,” The report by FATF cites 2007 transactions rejected and 43 accounts closed due to links to digital assets by Qatar Financial Center Regulatory Authority in 2019 but does not cite any enforcement action taken against crypto firms.

“No formal sanctions have been applied on a natural or legal person for contravening the prohibition,” the statement continued, despite the fact that there is an alleged unauthorised provider of cryptographic services operating within the country.

“There are major inconsistencies between Qatar’s risk profile and the type and extent of terrorist financing activity prosecuted and convicted,” said the FATF, an international watchdog based in Paris that monitors and mitigates dirty money flows, including by requiring participants to identify cryptocurrency transactions under the controversial “travel rule.”

While Qatar’s central bank governor has indicated that the bank is exploring the possibility of introducing a digital riyal, it is less crypto-friendly than its neighbour, such as the United Arab Emirates.

An assessment of the country, published on the central bank’s website, found that it met or largely met 40 technical requirements – “demonstrate the country’s commitment to combating illicit financing,” continued, “The State of Qatar continues to improve and continuously strengthen its combatting system based on international standards,” the statement added.

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