FATF to Conduct Checks & ‘Gray List’ Countries to Enforce Crypto AML Regulations

Global financial watchdog FATF has planned to perform checks and ‘gray list’ countries to ensure that they are implementing Anti Money Laundering (AML) and Counter-Terrorist Financing (CTF) regulations on crypto providers.  

As per Financial Action Task Force (FATF), the countries on the gray list have agreed to fix “strategic deficiencies” within set timelines and are thereafter under increased monitoring. The list currently includes 23 countries including Syria, Haiti, South Sudan, and Uganda. Pakistan was earlier on the list, however, after taking 34 actions to satisfy FATF’s concerns, it’s no longer under additional monitoring. Other crypto hotspots that are on the global financial watchdog’s gray list include the Philippines and the UAE, but according to FATF, both have made a “high-level political commitment” to enhance Combatting the Financing of Terrorism (CFT) and Anti Money Laundering (AML) standards.

According to a report from April 2022, countries particularly with Virtual Asset Service Providers (VASPs) aren’t adhering to the watchdog’s AML and CTF guidelines.

In March, it was found that many countries like Malta, the Cayman Islands, the Philippines, and the UAE have “strategic deficiencies” with regard to AML and CTF.

As per Svetlana Martynova, the Countering Financing of Terrorism Coordinator at the UN, cash and hawala both are the “predominant methods” of financing terrorism. She highlighted that cryptocurrency has been used to “create opportunities for abuse.”

“If they’re excluded from the formal financial system and they want to purchase or invest in something with anonymity, and they’re advanced for that, they’re likely to abuse cryptocurrencies,” Martynova said.

Suggested Read: FATF Points Out Jurisdictions with Inadequate AML/CFT Measures