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Updated Guidance for a Risk-Based Approach to Virtual Assets and Virtual Asset Service Providers

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The virtual asset sector is fast-moving and technologically dynamic, which means continued monitoring and engagement between the public and private sectors is necessary.

In October 2021, the FATF updated its 2019 Guidance for a Risk-Based Approach for Virtual Assets and Virtual Asset Service Providers (VASPs). This updated Guidance forms part of the FATF’s ongoing monitoring of the virtual assets and VASP sector.

The FATF standards require countries to assess and mitigate their risks associated with virtual asset financial activities and providers; license or register providers and subject them to supervision or monitoring by competent national authorities. VASPs are subject to the same relevant FATF measures that apply to financial institutions. This guidance will help countries and VASPs understand their anti-money laundering and counter-terrorist financing obligations, and effectively implement the FATF’s requirements as they apply to this sector. The guidance provides relevant examples and potential solutions to implementation obstacles.

The 2021 Guidance includes updates focusing on the following six key areas:

  1. clarification of the definitions of virtual assets and VASPs,
  2. guidance on how the FATF Standards apply to stablecoins,
  3. additional guidance on the risks and the tools available to countries to address the money laundering and terrorist financing risks for peer-to-peer transactions,
  4. updated guidance on the licensing and registration of VASPs,
  5. additional guidance for the public and private sectors on the implementation of the “travel rule”, and
  6. Principles of information-sharing and co-operation amongst VASP Supervisors
The document ‘In Brief

‘ provides a summary of the sections of the guidance and the key changes made in the 2021 update.

This guidance addresses the areas identified in the FATF’s 12-Month Review of the Revised FATF Standards on virtual assets and VASPs requiring further clarification and also reflects input from a public consultation in March –April 2021.

The FATF remains vigilant and will closely monitor the virtual assets and VASPs sector for any material changes that necessitate further revision or clarification of the FATF Standards. This includes in relation to areas covered in this Guidance such as stablecoins, peer-to-peer transactions, non-fungible tokens and decentralised finance.

More on:

Other Languages

Italian: Linee guida per un approccio ai virtual asset e ai prestatori di servizi in materia di virtual asset basato sul rischio

Russian: MUMCFM-FATF Risk-based Guidance-Virtual Assets and VA Service Providers

This news item was originally published by the The Financial Action Task Force (FATF). For more information, please see the Source Link.

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