On 31st May, RUSI published a Commentary saying that more needs to be done about the enforcement of rules that bind cryptocurrency exchanges.  May saw the takedown of the Wall Street Market and Silkkitie, 2 Dark Web marketplaces where illicit goods and services had been traded.  For some time now, it says, there has been no uniform international approach to the regulation of businesses that exchange cryptocurrency into state-issued, government-backed legal tender, also known as fiat currency – though in October FATF decided that AML/CFT obligations should be extended to ‘virtual asset service providers’, including both crypto-to-fiat and crypto-to-crypto exchanges.  But enforcement actions against cryptocurrency businesses remain few and far between.  The article identifies 2 reasons for this –

  • until states actually implement the FATF’s revised standards, their domestic regulations may not necessarily require cryptocurrency exchanges to undertake AML checks in the same way as, for instance, banks; and
  • less responsible exchanges can be located in jurisdictions with less than robust supervisory regimes (as is always the way for those wanting to avoid controls and oversight).

Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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