The FATF crypto recommendations compliance report of out and the United States has scored high marks. The Financial Action Task Force (FATF) has released a report regarding the level of adherence to its crypto guidelines by the member countries. The United States has secured a good score but is still not fully compliant with all the guidelines.
The FATF recommendations are a wide gamut of guidelines to be followed to ensure that countries prevent money laundering, crypto frauds, and terror financing activities. These anti-money laundering recommendations are adopted by 180 countries across the globe. Though not legally binding, the member nations willingly adhere to them to ensure transparency in their financial systems. Expulsion from FATF membership dents a country’s image and has a potential negative impact on its international trade relations.
The U.S. scores high but still fall short of excellence
The United States vigorously follows most of the AML guidelines recommended by FATF, especially those pertaining to cryptocurrencies. FATF follows a well-defined methodology to identify the level of compliance in a given jurisdiction. No member country wants to be on the FATF ‘Non-Cooperative Countries or Territories’ as it tarnishes the country’s financial reputation.
As part of the enhanced follow-up process, the FATF has re-rated the United States on its customer due diligence measures. See more here ➡️ https://t.co/y73dua3l6P #FollowTheMoney #FATF pic.twitter.com/wMGFW3SUxp
— FATF (@FATFNews) March 31, 2020
Effective assessment evaluates the standard of laws put in place by a member country to ensure financial stability. These are directly related to AML/CFT mechanisms. Money laundering and terrorist financing must be completely stopped. On the other hand, technical compliance represents the legal realm’s relationship with FATF crypto recommendations. Countries are rated Compliant, Largely Compliant, Partially Compliant, and Non-Compliant. Extensive evaluation helps member countries achieve a high degree of compliance and make suitable improvements.
The United States marked Largely Compliant with FATF crypto recommendations
The latest FATF report marks the United States in the Largely Compliant category. This means that barring little exceptions, the United States is fully compliant with recommendation 15 related to cryptocurrencies. High scores on FATF crypto recommendations mean that U.S. crypto licenses are coveted.
A notable deficiency was the lack of legislative clarity on VASPs that enjoy U.S. incorporation but don’t serve any purpose to its citizens. Lawmakers should address this concern. Also, the current inspection of cryptocurrency providers is extensive but opaque in terms of preventing AML.
