The world has been struggling to understand cryptocurrencies and how to deal with them. For now, each country has been trying to regulate them on their own. They set separate rules which cause confusion and chaos. Now, they are calling for unified regulations from the global money laundering watchdog.
The Paris-based Financial Action Task Force (FATF) announced that it will set rules as to how countries should regulate cryptocurrencies. According to FATF, the new rules will require countries to license or regulate exchanges and firms providing cryptocurrency wallets. It will require similar actions from firms that allow Initial Coin Offerings (ICOs). These new regulations will be up and ready by June 2019. FATF president Marshall Billingslea warned that countries that don’t follow the new rules will be placed on the FATF blacklist which means they will have restricted access to global financial markets. Those who participate will be heavily scrutinized to ensure that they implement the regulations correctly.
This new plan was set in motion due to countries’ rising worries about cryptocurrency scams and the rising fear that cryptocurrencies are being used in money laundering and terrorist fundings. However, many advocates don’t agree with how severe these threats are being made out to seem. Especially since there have been conflicting reports that keep giving rise to more fear and confusion. Data security company CipherTrade reported back in July 2018 that the money laundering amount through cryptocurrencies will hit more than $1.5 billion which is three times more the amount it reported back in 2017. Meanwhile, The Wall Street Journal reported that the number was $88 million with most of it coming from one company, ShapeShift.
In another report, Japan said that it only found 669 cases relating to cryptocurrency-related money laundering. Japan is one of the countries with the most crypto-related crimes, especially in the form of crypto exchange hacks. Therefore, it’s surprising that its numbers would be so low considering that it reported more than 300,000 cases for fiat currencies. Its reported numbers were not seen in the best of light by many other countries.
Regardless, upon seeing these different reports, it can be assumed that the fear may be worse in everyone’s mind that it truly is. Since most people don't understand cryptocurrencies and how they work, they resort to imagining the worst of the market. It doesn’t mean that there are no crimes in the crypto world, rather it may be the expected amount of crime that is to happen with anything relating to money. People only think there are more crimes happening because it’s new. Perhaps the new global regulations will reassure the world that cryptocurrency are not only for scammers.
The new regulations will not only provide security, but stability. The reason why most investors won’t enter the crypto market is because it’s so unregulated. Each region of the world deals with it differently. With a global regulation, investors would feel better entering the market. The new regulations also mean that the world is a step closer to accept cryptocurrencies as the currencies of the future.
Hermione is a Haitian-born writer who has been living in the USA since 2010. She earned her Bachelor’s degrees in English Literature and Interdisciplinary Studies at Florida International University. She has done both creative and technical writing during her years in the writing industry. She’s currently pursuing a career in the medical field.