Only 29 out of 98 jurisdictions meet the standards to implement the Travel Rule.
The Financial Action Task Force (FATF) has reinforced the urgent need for countries to adopt the "Travel Rule," a strategic measure designed to prevent crypto-enabled financial crimes like money laundering and terrorist funding.
On June 23rd, the international organization, recognized by the United Nations and charged with curbing illegal financial activities, expressed its concern over the sluggish attitude of some member states towards the rule's implementation.
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Based on a survey conducted by the FATF, it was observed that the majority of the participating countries exhibited inactivity in taking significant steps toward implementing the "Travel Rule." In the words of the FATF:
More than half of survey respondents have not taken any steps towards implementing the "Travel Rule," a key FATF requirement to prevent funds being transferred to sanctioned individuals or entities.
The FATF vehemently called for countries to immediately adopt Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) measures in crypto-related activities.
Data from a March 2022 survey shows a worrying trend: out of 98 jurisdictions, only 29 satisfied the requirements of the "Travel Rule," and an even smaller number had initiated enforcement procedures.
The "Travel Rule," brought into existence in June 2019 and revised in June 2022, was designed to address the anonymity offered by unlawful cryptocurrency transactions.
On June 27th, FATF plans to release a report highlighting the necessity for member countries to adopt its recommendations, which aim to seal the gaps that criminals have been exploiting. This report will reference North Korea's alleged illicit activities, which involve funneling stolen virtual assets into their Weapons of Mass Destruction program.
The impending report will also discuss risks emerging from other sources, such as stablecoins, decentralized finance (DeFi), non-fungible tokens (NFTs), and peer-to-peer transactions.
The FATF's renewed call for countries to implement the "Travel Rule" underscores the agency's commitment to fighting money laundering and terrorism financing in the crypto industry.
