Crypto AML: a complex but worthy compliance effort (April 2020)

Foreword: METI Advisory wrote this report for SEBA Bank AG. Abstract: The Financial Action Task Force (FATF) will review in June 2020 the state of adoption and implementation of the anti-money laundering (AML) standard for virtual assets (VAs) and virtual asset service providers (VASPs) issued in June 2019. This includes the so-called Travel Rule, conceived to extend to VAs and VASPs the quality of transactional compliance achieved in the fiat transactions world with the SWIFT messaging system. The industry is currently dealing with the daunting task of creating the technology needed to enable full compliance. More time is needed to bring it to market and see it adopted. The regulators should be pragmatic during the transition phase and focus on creating a level playing field in order to minimise arbitrage opportunities. The industry will benefit materially from swift and seamless compliance because the Travel Rule establishes a distinction – in terms of compliance quality – between ubiquitously accepted fiat transactions and still largely mistrusted cryptofinance transactions.