The Financial Action task force (FATF) has labelled the US as extremely compliant with its revised criteria in order to put a hold on money laundering and terrorists financing through digital assets.
On Tuesday, assessing the laws and regulations regarding cryptocurrency, the FATF group published its report on how well the US complies with its banking.
This is not to be confused with the fact that the US is completely in line, with the current technology standards set by the FATF, called the recommendation 15. The US is the most potent members, but it is still not omniscient. It carries some significant flaws in its system too.
FATF Highlights The Loopholes
For instance, The US registered money services record transactions and kept a record of them only if they were of $3,000 or more. FATF’s range is three times lower and at $1,000. They believed that this loose grip on it could let much slip through.
FATF notes that such a high threshold does not support the ML/ TF risks. They also found US lags in the department of convertible virtual currency. (CVC) businesses. They added :
Their strategy “does not specifically identify higher risk virtual asset service providers (VASP),” making their “various” examinations of high-volume exchanges and peer-to-peer networks insufficient. Therefore, it is not entirely clear whether the current approach is sufficiently risk-focused, especially since only 30% of all registered CVC providers have been inspected since 2014,” FATF wrote.
These loopholes might lead to lowkey VASP activity to get away without any detection and enforcement. For example, if VASP registered with the US do business with people not belonging to the country, they would be able to escape detection of any sorts.
FATF, despite slim criticism, had mostly good things to say about the US regulators in the virtual asset department and found it mostly in compliance with the Recommendation 15.
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