The Financial Action Task Force (FATF) in recent times is urging strict implementation of its apparent “travel rule” to facilitate the tracking of cryptocurrencies on a global scale.
India is all set to host the third edition of the “no money for terror” meeting in New Delhi from November 18 to 19 and ahead of it FATF is looking forward to efficiently implementing its regulation to ensure that cryptocurrency transactions are not misused by terrorist groups.
The no money for terror is going to be organized by India’s home ministry with the support of the external affairs ministry, which will be a useful platform to help fashion a coordinated global response to the misuse of cryptocurrency and virtual assets by terrorists. It is also expected to be attended by ministers, diplomats, and counter-terrorism experts from the Egmont group, an international organization that facilitates cooperation and intelligence sharing between national financial intelligence units (FIUs) to investigate and prevent money laundering and terrorist financing.
Sources familiar with the event confirmed that similar to India’s agenda during the UN Security Council’s Counter-Terrorism Committee (CTC) hosted by it on October 29, there would be a substantial focus on digital assets, especially cryptocurrency and its misuse, and crowd-funding platforms in the upcoming meeting. It will also focus on technical, legal, and regulatory matters related to countering terror financing.
The meeting will also focus on multiple ways to enhance the sharing of information and cooperation between FIUs of different countries. However, the transfer of money for terrorism funding through “hawala”, an informal method of transferring money without any physical money moving, remains the biggest concern. FATF has also announced its grey list for countries not adhering to its anti-money laundering (AML) regulations for cryptocurrencies as reported by Todayq.
In 2019, it developed the first set of standards for virtual assets Elisa de Anda Madrazo, vice-president of FATF in recent times has raised warnings citing slow progress of its implementation.
Madrazo also stated figures denoting that out of 200 member countries of FATF, only 60 have begun to regulate and supervise the digital assets sector and the rest of the world doesn’t have regulation and more than 50% of the countries have not yet started the process.
This scenario is highly concerning considering the urgency and on the other hand, the time required to implement standards. In her view, till the time countries don’t implement standards it is not possible to implement the travel rule which is to track all cryptocurrency transactions, including detailed information on senders, receivers, etc. The travel rule calls for the private sector including virtual asset providers, to receive and exchange data on senders and beneficiaries along with all transfers.
As per FATF’s review of the implementation of its 2019 recommendations for digital assets in June, the countries have made minimal progress in introducing the travel rule. Until March, only 29 out of 98 countries responded to FATF’s passing of travel rule legislation whereas only 11 countries started enforcement and regulatory measures.
As a measure to prevent the growing frequency of online terrorism, Madrazo urged the countries to efficiently regulate the digital assets sector and also called in contributions from the respective governments.