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The new rule for virtual assets has been devised in accordance with the crypto travel rule issued by the FATF.
The National Committee for Combatting Money-Laundering and Financing of Terrorism and Illegal Organisations (NAMLCFTC) held its eighth meeting of 2021, where the Committee issued a regulatory framework specifically for virtual assets, reported Reuters.
In particular, the Committee announced the adoption of a regulatory framework for virtual assets in the UAE, in correspondence with approved Anti-Money Laundering (AML) and Combatting the Financing of Terrorism (CFT) standards. The Committee has also assigned the Central Bank of UAE and the Securities and Commodities Authority to oversee its implementation.
“This regulatory framework is an initial step in providing comprehensive regulation of virtual assets, and safeguards the financial system and investors from money laundering and terrorist financing risks, in line with recommendation No. 15 of the Financial Action Task Force (FATF) International Standards on AML/CFT”, stated the Central Bank.
The global regulatory body, Financial Action Task Force (FATF) released the crypto Travel Rule in 2019 which mandated all cryptocurrency firms to comply with global AML/CFT standards. Under this regulation, crypto firms have been advised to comply with all rules to prevent the abuse of digital coins (such as bitcoin) for money laundering. The FATF’s move was the first worldwide regulatory attempt made towards constraining the rapidly growing sector.
The new rules for virtual assets in the UAE have been introduced in an attempt to bring down financial crimes committed through cryptocurrencies. The UAE also established the Executive Office of the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) in a similar attempt to monitor the enforcement of the country’s AML strategy.
Additionally, the country’s central bank also issues guidelines on a regular basis, allowing companies and individuals to assess risks associated with money laundering. Regulators of the country have also teamed up with other central banks and financial regulators to curb crypto-based crimes.