New Financial Action Task Force (FATF) travel rules have sparked controversy in the crypto realm. Now, OKEx Korea has said that trading and support has been terminated on five crypto assets given the latest FATF travel rules.
In June this year, FATF announced the new rules about cryptocurrencies and that includes the rather contentious ‘travel rule’. It states that all the information, including name, records, location, account number etc., related to a customer’s cryptocurrency transactions be recorded and stored by the relevant cryptocurrency exchanges.
The very idea behind privacy coins is to provide cover to its owner. They are difficult to track. With authorities making such requests using FATF travel rules, the privacy coin’s purpose itself is defeated. Naturally, OKEx Korea decided to terminate the trading of such assets.
After Korea, will more exchanges implement FATF travel rules?
OKEx Korea said in a blog post that termination of trading and support is done to comply with the latest FATF rules and covers five privacy crypto assets. However, trading on the coins is still available on the OKEx platform global. It means that the Korean government must have issued directions for compliance.
Korea becomes the first nation to undertake such compliance and implement FATF travel rules. More exchanges across the globe will follow suit. The exchanges that mostly deal in fiat-crypto dealings are highly likely to emulate the move to remain with the regulatory winds that are currently flowing against privacy coins.
It is worth noting that FATF guidelines are not legally binding but only recommendatory. Representatives from thirty-six nations come together to form FATF reflecting influential geographic locations.
The FATF jurisdictions, if asked officially, may have to submit the details of the transactions within twelve months. These new rules are only part of the preferred policy and not legal mandate. Thus, these jurisdictions will comply only if they want to. They are not legally binding to follow them.
Generally, influential financial centers are less likely to accept these guidelines. Giving control over to FATF isn’t something they would do voluntarily. Member countries will comply with the guidelines suitable to them because there are no adverse consequences of not adopting these rules.