Financial Action Task Force Publishes Guidance for a Risk-Based Approach to Virtual Assets and Virtual Asset Service Providers

The Financial Action Task Force has published the outcomes of its third and last Plenary meeting under the U.S. Presidency in Orlando on June 19-21, 2019. The FATF considered key issues such as strategic initiatives, mutual evaluations and the upcoming focus areas under the Chinese Presidency.

One of the strategic initiatives covered by the Plenary was the FATF's work on mitigating money laundering and terrorist financing risks associated with virtual asset activities. The FATF has announced that it has finalized an Interpretive Note to Recommendation 15 on New Technologies, in particular the section on the duty of virtual asset service providers to obtain and hold originator and beneficiary information on virtual asset transfers and submit such information to beneficiary service providers, counterparts and regulators. In addition, the FATF has published updated Guidance for a Risk-Based Approach to Virtual Assets and Virtual Asset Service Providers. The Guidance explains how the FATF Recommendations apply to virtual assets, activities involving virtual assets and to Virtual Asset Service Providers and other obliged entities that engage in or provide virtual assets, including banks and securities broker-dealers. The Guidance also describes the application of the FATF Recommendations to countries and relevant authorities and gives examples of approaches to regulating, supervising and enforcing the relevant activities and entities. The FATF confirms that over the next year it will be monitoring how countries apply the Recommendations, Interpretative Notes and Guidance in this area.

The Plenary also considered the FATF's current action taken to combat terrorist financing. To assist countries with identifying and understanding the terrorist financing risks that affect them, the FATF has finalized (but not yet published) guidance on Terrorist Financing Risk Assessments. The Plenary also decided that the FATF should prepare guidance to help countries effectively investigate and prosecute terrorist financing.

Furthermore, the FATF has published updated risk-based approach guidance documents for lawyers, accountants and trust and company service providers.

View the statement on Interpretative Note to Recommendation 15.

View the updated Guidance for a Risk-Based Approach to Virtual Assets and Virtual Asset Service Providers.

View the statement on outcomes from the Plenary.

View the risk-based approach guidance publications.

Return to main website.