At this year’s G20 summit, the sentiment for cryptocurrency discussions is to establish anti-money laundering (AML) regulations. In fact, officials favour the establishment of AML above regulations for trading virtual currencies.
Blockchains and cryptocurrencies have offered us several advantages, including but not limited to:
- immutable ledgers
- verified transactions and,
- the speed of peer-to-peer transactions (with the advent of blockchain technologies like Ripple and TRON)
Why do we need AML regulations?
However, along with these advantages, the anonymity associated with virtual currencies has led to nefarious activities by bad actors. This has been a major concern of regulators and governments alike. Whilst some governments have even been suspected of being bad actors themselves.
According to Reuters, cryptocurrencies provide a means for terrorist organizations and criminal syndicates to launder and relocate wealth across the globe quickly, easily, and privately, potentially even replacing bulk-cash smuggling.
Due to the fact that some governments’ regulations were weaker than others, there was rampant desire to set up anti-money laundering rules. This is incidental to the fact that the technology behind cryptocurrencies allows anonymity.
Japanese representatives, heading to G20 in Buenos Aires for March 19-20, were most notably interested in developing anti-money laundering regulations over cryptocurrency trading regulations. “The general feeling among the G20 members is that applying too stringent regulations won’t be good,” said one official.
The Financial Action Task Force (FATF) is actively working to develop measures that prevent money laundering. The FATF consists of 37 member-nations and will present a report for the G20 meeting on anti-money laundering regulations for digital currencies.
Earlier this year, the Japanese Financial Services Authority (FSA) announced that it would halt the trading activities of several exchanges. The FSA fined several other exchanges and also insisted that Coincheck Inc. raise its standards for management and AML.
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