Cryptocurrency exchanges based in the UK are “low risk” in terms of money laundering and terrorist financing activities, according to a report by the Financial Action Task Force (FATF).
The report concludes that although there is an “emerging risk”, there is not enough evidence to suggest that money laundering is being facilitated through cryptocurrency exchanges.
The FATF has asked the UK authorities to tackle the issues of money laundering and financing of global terrorism within the crypto space and elsewhere.
The regulator asked the UK to “continue to develop an understanding of emerging risks (such as virtual currencies) and intelligence gaps, and take appropriate action.”
According to the report, the UK has admitted that there are “inherent vulnerabilities” in relation to the anonymity of digital currencies.
— Igor Os (@igor_os777) December 11, 2018
Due to this, the UK are planning to regulate exchanges under its implementation of the EU’s fifth anti-money laundering directive, which will see exchange activities between fiat and crypto being monitored.
The FATF are expected to release a guidance for global cryptocurrency regulation in June 2019. The guide will outline how nations should govern cryptocurrency exchanges, digital wallet providers, and ICOs.
The planned guide comes after the issue of digital assets was discussed during last week’s G20 summit in Argentina. World leaders called for “international coordination” and reiterated their pledge to regulate digital assets.
“We will regulate crypto-assets for anti-money laundering and countering the financing of terrorism in line with FATF standards, and we will consider other responses as needed,” they said.