Cryptocurrencies should be governed by appropriate regulations, otherwise there is a risk of inciting widespread crime and embezzlement, he argues. Financial Action Working Group, a global anti-money laundering organization, released a new report on the subject on Thursday.
Founded in 1989, the FATF is an intergovernmental policy-making body that has helped create and promote financial crime regulations in countries around the world. While it can’t really force anyone to do anything, the FATF’s proposals have greatly helped run reforms designed to combat money laundering, terrorist financing and other bad things. FATF is composed of some 37 member jurisdictions, meaning it has significant influence in the global community.
Appropriately, the group has spent the last few years drafting policy proposals regarding digital currencies. The FATF announced the latest on Thursday report, outlining recommendations designed to combat industry crime, including calling on crypto platforms to do more to verify the identities of their users and to report suspicious activity to federal regulators more regularly. It’s all pretty dense, but the basic conclusion is this: regulate as soon as possible.
As such, the report seems to stand more on the wall for crypto enthusiasts who hoped the digital currency would remain a “wild west” burdened by the fraud it has always been. Recently moving Securities Commission, establishment new team “Crypto cops” in the US Department of Justice, and ongoing discussions by the Biden administration on expanded surveillance, everyone seems to be showing pressure to crack down on more cryptocurrencies in free ways.
Probably for a good reason. While a new FATF report optimistically argues that, with proper regulation, cryptocurrency could have “many potential benefits,” it also notes that, not surprisingly, the worst foothills of the industry are hotbeds of genuine criminal bullshit:
Most related to VA [virtual asset] the crimes highlighted in the report are focused on predicate or money laundering [money laundering] crimes, but criminals also used the VA to evade financial sanctions and raise funds to support terrorism. Types of offenses reported in jurisdictions include money laundering, sale of controlled substances and other illegal items (including firearms), fraud, tax evasion, computer crimes (eg cyber attacks resulting in theft and ransomware), child exploitation, human trafficking, sanction evasion, and TF [terrorist financing].
The report takes a rather indifferent view of the industry as a whole, perfecting itself with a particular focus on decentralized finance (DeFi), a crypto area dedicated to replicating the functions of traditional banking and finance such as trade and lending. In the real world, what it means are platforms that use automated software designed to negotiate financial transactions without third-party intermediaries. DeFi products and services have exploded in popularity in recent years, despite be connected with constant fraud, cyber attacks and large financial losses.
However, the FATF notes that just because these companies call themselves “decentralized” does not mean they are.
“It seems quite common for DeFi arrangements to call themselves decentralized when they actually involve a person with control or sufficient influence,” the report said.
In other words, someone still has control over your money – it’s simply not a federally regulated financial institution or a legally responsible banking professional. Instead, it’s about someone on the internet. As a result, the FATF suggests that many DeFi entities should be subject to many traditional legal restrictions that are “centralized” entities.
The report also brings back the widespread belief that cryptocurrency has helped drive the increasingly unwavering ransomware underworld: “VAs are a vital tool for ransomware actors, without whom their underlying crime would be much harder to cash in on. This makes the efficient and consistent application of FATF standards in this area even more important. ”
Let’s be honest: an industry without regulations is nothing more than a giant fucking robbery waiting to happen. relevant, time i time again cryptocurrency has proven that this is, for the most part, just an excuse for smart, skinny rich people to take advantage for the not-so-smart rich and, of course, for cyber criminals have a field day.
In an ideal world, we wouldn’t be forced to deal with this completely fictional, environmentally taxable a problem that now takes money and resources away from real ones. But what kind of world is it, regulations seem like a good idea, right? Yes.
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