An improved call from the Financial Action Task Force has asked the countries to implement the Crypto Travel Rule- which would be used to combat money laundering schemes, and terrorism financing activities- which are enabled by cryptocurrencies.
On 23rd June, the United Nations body- which has a role in promoting strategies to combat money laundering and terrorist financing, went on to explain that a lot of the member states had failed in implementing this rule. The call also comes after a series of meetings by the FATF at its Paris headquarters. FATF also claimed that over half of the respondents had stated that they had taken no action to implement this rule.
Crypto Travel Rule Could Have Certain Loopholes- According To FATF
FATF then urged the countries to implement Counter Terrorism Financing and Anti-Money Laundering measures on crypto-related activities without delay- which would prevent the criminals from being able to exploit significant loopholes which were not protected by some form of regulation. A survey from March 2022 by FAFT also found that only 29 of the 98 jurisdictions at the time had passed the requirements which were needed as part of the travel rules- while a smaller subset of these jurisdictions had started some form of enforcement.
The crypto travel rule by the FAFT was implemented to target the anonymity of illegal cryptocurrency transactions. This was introduced in June 2019 and then updated last in June 2022. A further update of the rules was then agreed upon by the FATF members at the various meetings.
FATF further stated that it would be publishing a report on the 27th of June where it would be calling all the member countries to implement the recommendations in order to close the loopholes which criminals would try to exploit within the crypto travel rule.