It has been a tough few years for both the authorities and companies involved with crypto in any shape or form. For a minute almost every government was simply dismissing the existence of cryptocurrencies. Crypto adoption seemed like a dream.
Crypto exchanges pose low risk for money laundering
Moving forward to a few years down the line, FATF (Financial Action Task Force), an intergovernmental organization that develops policies to combat money laundering and terrorism financing, says that UK crypto exchanges present low risk for money laundering. Even though, to most people, this news isn’t a big deal it might lead to a further involvement of the authorities in the industry.
FATF stated that money laundering and terrorism financing are an “emerging risk”, but admitted that there is not enough evidence they are occurring through crypto exchanges. The organization confirmed that the UK government was taking proper measures to mitigate the use of cryptocurrencies among launderers and terrorists.
The UK will regulate cryptocurrency exchanges under its implementation of the EU’s fifth Anti-Money Laundering Directive and monitor exchange services between crypto and fiat, as well as wallet providers. FATF addressed the vulnerability associated with the anonymity of digital currencies and asked the UK authorities to “continue to develop an understanding of emerging risks (such as virtual currencies) and intelligence gaps, and take appropriate action.”
Crypto & Regulation
Regulation and laws are set up to protect society, they reflect norms, protect our general safety, and ensure our rights. Global bodies such as the G20 and FATF set standards, commitments or recommendations, then the regional or local bodies interpret that output and implement local laws.
Clarity and education on the topic can help speed up the journey to crypto acceptance as an asset class alongside fiat currencies, gold, emissions and so on. Despite the nature of cryptocurrencies that makes them hard to be overseen by a governmental authority, most people feel much safer when their assets are supervised by regulators. Regulation will be an indicator of government acceptance and should bring greater adoption.
It is important that crypto businesses recognize the importance of regulation, set up compliance measures, like AML and KYC procedures. Regulators from their side are getting more open, asking questions and learning more about the crypto landscape.