On March 19, 2021, the Financial Action Task Force (FATF) announced plans to update its existing guidance on the risk-based approach to virtual assets (VAs) and virtual asset service providers (VASPs). The FATF originally published this Guidance in June 2019 when the FATF finalized changes to its Standards to clearly place anti-money laundering and countering the financing of terrorism (AML/CFT) obligations on VAs and VASPs. In July 2020, the FATF committed to update this Guidance as set out in its 12-month review report and report to G20 on so-called stablecoins.
According to their release, FATF explains that the revised document provides updated guidance in six main areas, including:
Clarify the definitions of VA and VASP to make clear that these definitions are expansive and there should not be a case where a relevant financial asset is not covered by the FATF Standards (either as a VA or as a traditional financial asset);
Provide guidance on how the FATF Standards apply to so-called stablecoins;
Provide additional guidance on the risks and potential risk mitigants for peer-to-peer transactions;
Provide updated guidance on the licensing and registration of VASPs;
Provide additional guidance for the public and private sectors on the implementation of the ‘travel rule’; and
Include Principles of Information-Sharing and Co-operation Amongst VASP Supervisors. The Guidance has also been updated to reflect the passage of time and the publication of other relevant FATF reports.
FATF explains that these changes attempt to maintain a level playing field for VASPs, based on the financial services they provide in line with existing standards applicable to financial institutions and other AML/CFT-obliged entities, as well as minimizing the opportunity for regulatory arbitrage between sectors and countries.
FATF is accepting comments on the revised guidance through April 20, 2021.
The FATF release can be found here.
A draft version of the revised guidance can be found here.