By David Drake
Global anti-money laundering policy maker, FATF (Financial Action Task Force), has noted a drop in risks relating to money laundering and terrorism financing in the UK cryptocurrency space. Even so, the agency has stated that there is nothing to suggest these activities occur on the crypto space but deems them an emerging risk.
The report comes as good news for crypto players in the country in light of recent scam that have left many investors with thinner wallets and deprived trust. As more exchanges pop up in Europe and Asia, large-scale investors will welcome an environment where they can feel safe even if the threats are merely abstract.
In the UK, the safer environment for cryptocurrency trading did not happen by chance. The country has made deliberate steps to institute actionable measures that effectively combat terrorist financing and hacking. Policy makers in the country are very much aware of the illicit purchases and sales perpetuated online due to intelligence gaps. Such gaps emanate from inherent susceptibilities that are linked to the anonymous nature of cryptos.
The UK was awarded the highest rating by the FATF for its effort to address nuances created by cryptocurrency trading as well as traditional financial schemes. In tandem with suggestions made to UK regulators, FATF has issued a global standard warning to nations dealing in cryptocurrencies. The agency has issued a crypto regulation guide that outlines how exchanges and companies issuing initial coin offerings (ICOs) should operate.
This represents a collaborative effort from G20 nations as they try to establish universal standards that will aid in seamless cross-border relations. FATF will continue to monitor the use, trade and transactional aspects of cryptocurrencies to ensure that highest standards are adhered to, providing a safer environment for consumers and investors.
Since inception, the decentralized nature of virtual assets has appealed to many investors and consumers. However, zero policing has led to scamming, theft and an overall lack of trust in the industry especially for heavy spenders. UK’s response to this inherent risk, other than the implementation of the EU’s fifth Anti-Money Laundering Initiative, is to monitor services provided by crypto exchanges, fiat currencies as well as wallet providers.
Known to be the largest cross-border center globally, the UK was especially at risk for money laundering and terrorist financing. The FATF report made a definitive ruling on the present status of the country, having already evaluated its policies back in 2007. The country has overhauled its policies and is now a safer place for cryptocurrency trade and use.
As more and more exchanges pop up on the global financial scene, and potentially large entities, such as institutional investors eye the market, this news will result in many nods on the faces of investors and consumers. “This should boost confidence for investors and consumers wary of the technology,” notes Joseph Oreste CEO of Qupon.
Already a major banking sector globally, the UK could potentially lead the charge as countries vie for top spots in the crypto space. When it comes to regulations, as far as things go, the UK is way ahead of the game.
Disclaimer: David Drake is on the advisory board for most of the firms mentioned or quoted in this article.