The Financial Action Task Force (FATF), the global anti-money laundering watchdog, has released an updated set of guidelines for the cryptocurrency market. The final guidelines make improvements and provide more clarity on the previously released draft guidelines. The guidelines focus specifically on how regulators should treat new markets such as NFT and Defi.
“Countries should not base their definitions on the nomenclature or terms an entity uses to describe itself or the technology it uses for its activities… The obligations in the Standard FATF is rooted in the underlying financial services provided without regard to the entity’s operating model, technological tools, ledger design, or any other operational features.”
The draft guidance clarifies that NFTs should not be considered traditional digital or virtual assets, but that if they are to be traded in a manner that complies with FATF guidelines, they must be managed appropriately. in the same box.
“Some NFTs that on the surface do not appear to constitute VA may fall under the definition of VA if they are used for payment or investment purposes,” the guidelines say. “Other NFTs are digital representations of other financial assets already covered in the FATF Standard. As such, such assets are excluded from the FATF definition of VA, but will be treated as such by the FATF Standards. ”
FATF has cleared up problems with Defi
The main problem with the final draft guidelines on the cryptocurrency market lies in Decentralized Finance (Defi). Most of the guides are perfectly suited to centralized platforms and exchanges but don’t make much of a statement on the Defi front. Thus, FATF found a solution that, instead of tweaking the protocols, it would hold the Dex and Dapss platform operators responsible and liable. FATF said,
“May have control or sufficient influence over the content or aspects of the service protocol and the existence of an ongoing business relationship between them and the user, even if this is done through smart contracts or in some cases voting protocols. Countries may also want to consider other factors, such as whether which parties profit from the service or have the ability to set or change parameters to determine the owner/operator of an agreement. DeFi agreement or not. ”