Countries covered by the Financial Action Task Force are required to conduct anti-money laundering reviews annually instead of every 10 years or risk being added to the 'grey list,' or worse, be blacklisted.
Beginning January 2023, wallet providers and digital asset exchanges in Switzerland will be mandated to follow the new KYC regulations, including a CHF1,000 threshold on digital asset transactions.
In its report, Moneyval acknowledged that the emerging virtual assets sector and the increasing use of digital currencies is becoming a significant challenge to combat money laundering.
Lenders and money service businesses, including digital asset exchanges, had the poorest understanding among financial institutions, according to the Financial Action Task Force report.
Binance founder Changpeng Zhao tweeted that while the exchange is being linked to the bad guys, the bank is not, even though they use the “same or stronger” AML tools as banks.
The head of the Mexican Financial Intelligence Unit, Santiago Nieto Castillo, stated that the 12 exchanges were operating illegally during a recent event focused on financial intelligence and risk management.
Documents published by the European Union show plans are already at a developed stage for the body, which would seek to enforce new rules on the transparency of digital currency asset transfers.
In his confirmation hearing before the Senate Banking Committee, Brian Nelson said he would make implementing new anti-money laundering legislation a top priority as he moved into the post.
The revised guidance comes after a 12-month review of the initial release, which found that some jurisdictions’ AML and CFT regimes with respect to digital assets were still underdeveloped or not developed at all.
Compliance officers at financial institutions feel they still have a low understanding of digital assets, blockchain, and their surrounding legal issues.
The new guidelines include the need to apply for an operating license, the minimum capital for service providers and stringent anti-money laundering programs.