The Financial Action Task Force (FATF) published its Travel Rule last June, proposing a means by which cryptographic currency exchanges and other custodians can operate while complying with existing rules Anti-Money Laundering (AML) and Know Your Clients (KYC) regulations.
During this period, several countries have adopted different approaches to regulating the cryptographic space in terms of information control and user identity.
In the US, compliance is strong
In the USA, the Banking Secrecy Act forms the basis for anti-money laundering regulations. Financial institutions have been complying with the rules for decades, but in 2013 the Financial Crimes Enforcement Network (FinCEN) called for cryptographic currency companies to be made to ensure full compliance as well. Last year, the agency also issued its BSA travel policy for crypto companies and issued its guidelines to digital asset service providers.
Earlier this week, Steve Mnuchin, Secretary of the US Treasury, announced at a hearing with the Senate Financial Services Committee that FinCEN is also working on developing cryptographic currency laws. As he told the committee, the agency has noted a rapid increase in cryptographic use, and while acknowledging that the technology is innovative, they would also ensure that these assets are not used like Swiss bank accounts .
Unequal compliance across Europe
The European Union is a slightly different case. As an economic bloc, the Union has accepted the need for effective regulation of the crypto-currency area and has fully adopted the FATF travel rule. At that time, the stakes for crypto-companies in the EU were even higher when the bloc adopted the Fifth Anti-Money Laundering Directive (AMLD5 ).
The AMLD5 is not as strict as the FATF’s travel rule, but it does confer some significant responsibilities on crypto-companies in the EU. The most important of these responsibilities concerned the keeping of customer records, a decision that led to the mass exodus of cryptographic companies in the region.
Regardless of this, the AMLD5 came into force in January 10 and several crypto-companies in the EU are still committed to fighting it. There is also the issue of the UK, which left the EU earlier this year. Although it complied with the rules until it left, there was no word on whether this would continue.
Countries on the road to compliance
Switzerland, considered by many to be the most crypto-friendly nation, recently made changes to its Payment Services Act to comply with FATF rules. Last week, the Swiss Financial Market Supervisory Authority lowered the threshold for unidentified crypto exchanges from CHF 5,000 (USD 5, 2013) to CHF 1,000 ($1,000). It is expected that other elements of the law could also be changed.
Singapore is also working to join. In December, the Monetary Authority of Singapore confirmed that it “intends to amend the PS Act to bring it fully into line with recent improvements in FATF standards”.