On 21 June 2019, the Financial Action Task Force (FATF) updated its Recommendations by adding an interpretative note to Recommendation 15 which sets out in detail the application of the FATF Standards to virtual asset activities and service providers.
The interpretative note establishes binding measures relevant for both countries and virtual asset service providers (as well as other obliged entities that engage in or provide virtual asset products and services) in order to establish a more level playing field across the virtual asset ecosystem.
The obligations require countries to assess and mitigate their risks associated with virtual asset activities and service providers; license or register service providers and subject them to supervision or monitoring by national competent authorities and implement sanctions and other enforcement measures when service providers fail to comply with their anti-money laundering / countering the financing of terrorism (AML/CFT) obligations; and underscore the importance of international cooperation. The interpretative note also requires countries to ensure that service providers also assess and mitigate their money laundering and terrorist financing risks and implement the full range of AML/CFT preventive measures under the FATF Recommendations.
The FATF has also published updated guidance for a risk-based approach to virtual assets and virtual asset service providers.