FATF Urges Qatar to Increase its Efforts Against Money Laundering

A recent FATF evaluation of Qatar’s anti-money laundering procedures says local regulators must watch over digital asset transactions and underscores the risk that regulatory gaps could lead to exploitation.

According to the FATF, the local regulators must increase their monitoring of digital asset transactions in Qatar as part of its anti-money laundering assessment. However, the FATF warns that regulatory shortcomings leave the country vulnerable to bad actors, despite the country’s impressive progress.

These loopholes could lead to Qatar being demoted to the FATF’s grey list because of increased risks associated with terrorism financing, drug trafficking, fraud, and smuggling, despite its low domestic crime rate. FATF stated that regulators are treating AML violations leniently due to the borderless nature of digital currencies.

“There are major inconsistencies between Qatar’s risk profile and the type and extent of terrorist financing activity prosecuted and convicted,” read the report by FATF. “No formal sanctions have been applied on a natural or legal person for contravening the prohibition.”

Only a few crypto exchanges in Qatar adhere to the FATF’s travel rule, which requires them to share information with authorities about parties associated with crypto transactions. Despite the negative streak regarding digital assets, Qatar’s efforts to confiscate the proceeds of crime were praised by the FATF.

“Qatar has a robust framework to implement targeted financial sanctions related to terrorist financing and used this to seize a large number of assets, but the country needs to focus more on its implementation of proliferation financing sanctions,” read the report.

The Qatar Central Bank (QCB) defended its position by stating that the positive remarks of FATF “demonstrate the country’s commitment to combating illicit financing.”

Globally, regulators are improving their anti-money laundering rules to comply with the FATF’s requirements. By ratifying the FATF’s travel rule, Japan became the first country to introduce stronger anti-money laundering regulations for digital currencies.

“G7 countries should lead by example and regulate the crypto sector so that no safe havens exist for illicit crypto transactions,” remarked FATF President Raja Kumar.

Governing bodies will be able to supervise digital currency asset providers by adhering strictly to FATF recommendations. Recent collapses may force regulators to respond to the issue, despite concerns that such a method would stifle innovation within the industry.

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