FATF Rates US As ‘Largely Compliant’ In Crypto AML/CTF Report, But Still Has Work To Do


In its recent revaluation on whether the United States is compliant with the set worldwide regulations on counter-terrorist financing (CFT) as well as anti-money laundering (AML), the Financial Action Task Force (FATF), has rated the US as ‘largely compliant’.

According to a FATF report that was released on March 31, the US was evaluated on its laws and regulations dealing with virtual assets and cryptocurrencies and was rated as largely compliant. The evaluation exercise mostly focused on recommendation 15 which deals specifically with crypto.

The ranking means that the US’s compliance with the recommendations has not changed since the last assessment that was conducted in 2016. However, FATF has updated its guidelines severally since then with the recent one being in October last year on FATF travel rules. Therefore, the latest assessment involved deeper scrutiny than the previous one.

The report noted some notable awareness about the risks posed by digital currencies as depicted by different regulators. The report singles out the different task forces as well as reports that have been looking at money laundering and crime financing through cryptocurrencies.

The FATF also notes that the current US regulations are working well in dealing with various Virtual Asset Service Providers (VASP) as per the FATF guidelines as they cover crypto exchanges and custodians. Nevertheless, the FATF is concerned that the regulations do not adequately deal with a VASP which is incorporated within the US but does not operate in the country, Cointelegraph reports.

Firms dealing with cryptocurrencies are categorized as Money Services Businesses (MSB) and are subjected to a higher compliance standard. Majority of MSBs have to come up with their own AML as well as CTF standards and, according to the FATF they are generally sufficient.

The report concludes that the US regulators have been lax in pointing out crypto service providers when they are enforcing regulation. However, the issues identified by the body seems to be minor making the US to be awarded a ‘B’ as per the FATF grading system.

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