{"id":4092,"date":"2020-04-06T22:20:08","date_gmt":"2020-04-06T22:20:08","guid":{"rendered":"https:\/\/www.sygna.io\/?p=4092"},"modified":"2020-05-12T03:25:40","modified_gmt":"2020-05-12T03:25:40","slug":"fatf-3rd-united-states-follow-up-report-crypto-virtual-asset-regulation-technical-gaps-and-minor-deficiencies","status":"publish","type":"post","link":"https:\/\/www.sygna.io\/zh-hant\/blog\/fatf-3rd-united-states-follow-up-report-crypto-virtual-asset-regulation-technical-gaps-and-minor-deficiencies\/","title":{"rendered":"FATF 3rd Follow-Up Report: U.S. Crypto Regulation “Largely Compliant”, but with Deficiencies"},"content":{"rendered":"\n
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Overview<\/h2>\n\n\n\n
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On 31 March 2020, the Financial Action Task Force (FATF) released its latest follow-up report on the United States, which aims to align the U.S.’ anti-money laundering and counter-terrorism funding (AML\/CFT) policies with its FATF Standards<\/a>. <\/p>\n\n\n\n

This is the States’ 3rd enhanced follow-up report<\/a> and first technical compliance re-rating since its 2016 Mutual Evaluation Report (MER)<\/a>. The FATF’s follow-up report praises but also offers improvements for the regulation of virtual assets (also known as digital assets) in the States.<\/p>\n\n\n\n

While the FATF now finds the United States “largely compliant” with its updated guidances like the Recommendation 15 on New Technologies, it has highlighted a few \u201cminor deficiencies\u201d and “technical gaps” still associated with virtual assets that may enable bad actors to evade AML\/CFT efforts. <\/p>\n\n\n\n

This is an area that U.S. regulators like FinCEN and the SEC are still struggling to build a cohesive and clear framework for, due to its complexity and swift-changing nature.<\/p>\n\n\n\n

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\"FATF<\/figure><\/div>\n\n\n\n
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In their latest report, officially monikered the \u201c3rd Enhanced Follow-Up Report & Technical Compliance Re-rating<\/a>\u201d, the FATF again assessed the States according to its technical compliance of the FATF\u2019s non-binding 40 Recommendations<\/a>, an AML\/CFT bible followed by its 200+ associated countries. <\/p>\n\n\n\n

The FATF found the U.S. to be compliant on 9 recommendations, largely compliant (LC) on 22, partially compliant (PC) on 5 and non-compliant (NC) on 4. <\/p>\n\n\n\n

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U.S. Technical Compliance<\/td>Rated Recommendations <\/td><\/tr>
Compliant (C)<\/td>9<\/td><\/tr>
Largely compliant (LC)<\/td>22<\/td><\/tr>
Partially compliant (PC)<\/td>5<\/td><\/tr>
Non-compliant (NC)<\/td>4<\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n
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\"U.S.<\/figure><\/div>\n\n\n\n
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FATF says U.S. virtual asset regulation “largely compliant”, but…<\/h2>\n\n\n\n
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The FATF report praises the United States for their improved regulation of virtual assets as follows:<\/p>\n\n\n\n

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\u201cUS authorities understand and are aware of the ML\/TF risks emerging from virtual assets. Aside from various taskforce and working groups set up to consider the risks, their risk understanding is also reflected in their 2018 National Money Laundering Risk Assessment and National Terrorist Financing Risk Assessment, as well as the 2018 National Strategy for Combating Terrorist and Other Illicit Financing.\u201d<\/em><\/p><\/blockquote>\n\n\n\n

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The task force also singles out FinCEN\u2019s May 2019 guidance<\/a> on Convertible Virtual Currencies (CVCs)<\/a> as \u201ca good overview of the existing regime and regulatory expectations with regard to CVC providers in the U.S.\u201d<\/p>\n\n\n\n

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Recommendation 10 &15: Minor deficiencies and technical gaps<\/h3>\n\n\n\n
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However, in its assessment of the U.S.\u2019 compliance with Recommendation 10 on Customer Due Diligence and Recommendation 15 on New Technologies, the FATF flagged the following \u201cminor deficiencies\u201d and \u201ctechnical gaps\u201d:\u00a0<\/p>\n\n\n\n

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