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Virtual Asset Service Providers should work together to comply with FATF standards

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“You have to have systems in place,” said Rick McDonell, Former [FATF] Executive Secretary and Executive Director at Association of Certified Anti-Money Laundering Specialists [ACAMS] on the latest edition of Binance Podcast with Binance CFO Wei Zhou.

McDonell said,

“Digital assets and virtual assets service providers are one of the newest but most important areas of for how do you effectively not only protect yourself but how do the authorities try to ensure that in the space is moving so rapidly and does have an element of anonymity attached to transactions, how do the asset asset providers comply, what are they required to do. This is a space that is very new in terms of regulatory compliance but one that’s highly important.”

McDonell went on to comment that the “onus at the moment is on the industries in the digital space,” an onus to come up with technical ways in which they can meet the standards set by the FATF

Virtual Asset Service Providers [VASPs] do not have access to the same information that traditional financial institutions collect on a regular basis. However, the FATF’s recommendations require crypto-platforms to collaborate with one another by sharing information about the users every time one of their users chooses to conduct a transaction. In line with the published recommendation, McDonell stated that the first step should be “customer diligence” and that “sharing of information” is very important.

While noting that a process like this is difficult in the digital space and identification of VASP’s clients and customers cannot be done in a “comprehensive fashion” as opposed to the traditional space, the former FATF exec admitted that he was not sure as to how much information can be exchanged. In order to keep the industry clean, one of the important objectives, according to him, is to alert an exchange’s competitors in case of suspicious transactions.

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Biraajmaan is a full-time journalist at AMBCrypto covering the US market. A graduate in Automobile engineering, he writes mainly about regulations and its impact with a focus on technological advancements in the crypto space.
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