FATF General Meeting Report Strengthening Implementation of Standards to Prevent Abuse of Virtual Currency


International cooperation in countering ransomware attacks

The Financial Action Task Force (FATF) reported on the 24th the results of discussions at its general meeting held from 22nd to 24th. Regarding crypto-assets (virtual currencies), we also agreed on an action plan for globally enforcing the FATF standards.

FATF was established in 1989. It is a multilateral organization that develops international standards for measures against money laundering and terrorist financing and conducts mutual reviews of their implementation status. Thirty-seven countries and regions, including the G7, and two regional organizations are members of the FATF, and FATF recommendations apply to more than 200 countries and regions around the world.

Cryptocurrencies were first mentioned in the context of fighting ransomware.

The FATF said there has been a significant increase in the scale and number of ransomware attacks targeting individuals, businesses and government agencies around the world in recent years. Criminals say they get a large ransom, mostly in the form of virtual currency, and disappear.

Criminals have easy access to cryptocurrency service providers around the world, especially those in countries and regions with poor or no AML/CFT practices. continued to be concerned about the use of

The FATF explains that because ransomware attacks transcend national borders, it is essential to build or utilize international cooperation mechanisms. He also said authorities must develop skills and tools to quickly gather information, track cryptocurrency transactions in real-time, and recover assets before they dissipate.

To that end, it is necessary to cooperate with organizations that specialize in cybersecurity and data protection.

The number of ransomware attacks has skyrocketed, especially since 2020. In May 2021, Colonial Pipeline, which provides the largest fuel pipeline in the United States, was damaged and paid nearly 540 million yen in virtual currency.

connection: Damage from ransomware attacks paid for in cryptocurrency significantly increased = Chainalysis

The FATF plans to issue a report on its anti-ransomware measures in March.

What is ransomware

Malware that demands money in exchange for restoring the original state after hacking. Also known as ransomware. Once infected, it encrypts other people’s important documents and photo files without permission, locks the PC to restrict its use, and demands money.

Cryptocurrency Glossary

Enforcement of travel rules

The FATF also agreed on a roadmap to strengthen enforcement of the “Travel Rule” and others. As a background, many countries currently do not have regulations on virtual currencies, which may create opportunities for criminals and terrorists to exploit them.

The roadmap also included a survey of the level of implementation of FATF recommendations on cryptocurrencies globally.

In the first half of 2024, the FATF will report on measures taken by FATF member countries and FSRB (FATF-type regional body) countries to regulate and supervise cryptocurrency service providers.

The “Travel Rule” is an international rule presented by the FATF to prevent money laundering. It is a rule that an exchange company that remits virtual currency at the request of a user must notify the exchange company on the recipient’s side of the remittance requester and the recipient of certain items.

In December 2010, the House of Councilors approved and enacted the “Bill for Response to FATF Recommendations,” which bundled together six laws related to money laundering. Priority issues to be addressed in the future include implementation of transaction monitoring, measures to freeze assets, and ongoing customer management.

connection: Japan Enactment of a bill to respond to FATF recommendations related to virtual currency money laundering

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