December 11, 2018 | AtoZ Markets - The Financial Action Task Force (FATF) which few months ago reported about their plans of tightening measures toward cryptocurrency activity showed certain concerns about crypto regulations in the UK .
Money Laundering Statistics
According to the study conducted by the United Nations Office on Drugs and Crime (UNODC) on the size of illegal funds generated by drug trafficking and organized crimes in 2009, criminal incomes amounted to 3.6% of global GDP, with 2.7% (or USD 1.6 trillion) being laundered. This number falls within the estimate by the International Monetary Fund, who stated in 1998 that the cumulative size of money laundering in the world could be between two and five percent of the world’s GDP in other words between USD 590 billion and USD 1.5 trillion. Seven years later the same organization (UNODC) estimated that between 2 and 5% of global GDP is laundered each year. That’s between EUR 715 billion and 1.87 trillion each year.
FATF: UK needs to improve crypto regulations
According to the recent report posted on moneylaundering.com, UK has the most effective controls against money laundering out of 60 countries. Despite such positive note, based on the evaluation of the current Anti-Money Laundering (AML) and Counter-Terrorism Financing Act (CTF) efforts in the UK, FATF outlined the need to give the British money laundering protocols involving cryptocurrency regulations a “significant overhaul. The same attitude towards crypto legislation in the UK has Cryptoassets Taskforce. In its report, published on October 29 department of the government’s FinTech Sector Strategy, suggested a number of changes for cryptocurrency regulation.
Paris-based global money laundering watchdog organization set certain sights on the United Kingdom emphasizing their need to improve the monitoring of cryptocurrency. According to the recent FATF report, the British financial regulators need to focus on preventing money laundering, while protecting the country against terrorist financing. The anti-money-laundering organization warned that U.K. officials must strengthen supervision of lawyers and accountants for anti-money laundering purposes, regularly examine financial institutions, and boost the manpower and technical capabilities of the country. Financial Intelligence Unit of FATF emphasized the importance of paying attention to real estate agents and high-value dealers. According to the money laundering watchdog, these sectors usually do not understand the risks involving money laundering with cryptocurrency, and don’t know “how to effectively mitigate them." As financials regulator emphasized, “virtual currency exchange providers are not yet covered by AML/CFT requirements.” FATF report pointed on lack of evidence suggesting that broad scale ML/TF is occurring in the UK through this “relatively small sector,”
FATF, Fintech and Regulatory Technology Share Common Intentions
The debates surrounding the crypto regulations in the UK still continue. Cryptocurrency trade association CryptoUK urged the government to introduce regulation to avoid the UK falling behind the rest of the world. In February, the Treasury Committee launched an inquiry into digital currencies and distributed ledger technology, looking at what form of regulation could take. In September, the Financial Conduct Authority (FCA) put together a cryptocurrency regulation task force in association with the Bank of England. Although there has been plenty of work done, the results have caused mixed reviews. Possible Bitcoin future of being blacklisted caused public concern. FATF has examined the way that local authorities have “identified and assessed the risks associated with new payment methods,” and are now “preparing regulations to extend AML/CFT requirements to this sector. ”Part of the recommendations that they made were for the U.K. to “progress plans to extend AML/CFT requirements and related supervision to virtual currency exchange providers.” FATF President Santiago Otamendi of Argentina who assumed the position from 1 July 2017 to 30 June 2018 in his recent interviews emphasized the importance of deepening and strengthening dialog between FATF and the local Fintech organizations as well as with the Regulatory Technology (RegTech) facilities. In his conversation with the press, Otamendi stated that Fintech, RegTech and FATF have common objectives in order to foster and contribute with financial inclusions,working together and detecting financial crimes.
Think we missed something? Let us know in the comments section below.