The digital currency industry will face the most severe blow in history: will it be regulated or blocked?

FATF is going to take action on digital currencies! Do you have any questions? Don’t panic! Let’s talk about this matter and see how FATF is going to take action on digital currencies.

1. News “explosion”: Is digital currency going to be doomed?

The full name of FATF is: Financial Action Task Force, the Chinese name is: Anti-Money Laundering Financial Action Task Force, which is an intergovernmental organization composed of more than 200 countries (some say 38 countries), including China. Simply put, this organization is an anti-money laundering organization.

The most important news in the history of cryptocurrency comes from a piece of news, which says: FATF will release a report on June 21, which will clarify how its member countries should regulate virtual assets. According to the agency's spokesperson Alexandra Wijmenga-Daniel, the new rules will apply to companies that use tokens and cryptocurrencies, including exchanges, cryptocurrency custody service providers, and crypto hedge funds.

This matter has been a hot topic these days. Some people say that this new regulation will bring the most severe blow to cryptocurrency in history. Some netizens on Weibo even called this news an S-level major event. Some people also rumored that cryptocurrency is going to be finished... Do you feel panicked after reading this? Don't panic! Let's introduce the ins and outs of this matter in detail. After reading it, everyone can judge whether this is a good thing or a bad thing.

2. FATA digital currency anti-money laundering supervision: always on the way

We know that cryptocurrencies are currently used by some criminals for money laundering, and the FATF's responsibility is to combat money laundering. Therefore, it is normal for the FATF (Financial Action Task Force on Money Laundering) to focus on cryptocurrencies. Moreover, the FATF's attention to cryptocurrencies is not a sudden whim.

As early as April this year, FATF submitted a report to the G20 in Japan, which focused on cryptocurrencies. The report describes FATF's work in the field of cryptocurrencies and promises to update its guidelines - continue to assist various jurisdictions and the private sector to implement a risk-based approach to regulating virtual asset service providers, including their supervision and monitoring. While emphasizing various risks such as money laundering, FATF also recognizes technological innovation and believes that virtual assets may bring significant benefits to the financial system and the broader economy.

See? They are talking about regulatory service providers, yes regulation! And they are also saying that cryptocurrencies may bring benefits to the financial system…

Last weekend, from June 8 to June 9, at the G20 summit held in Japan, financial regulators including FATF focused on discussing cryptocurrencies, focusing on topics such as cryptocurrency regulatory policies, investor protection, market integrity, and anti-money laundering. G20 finance ministers and central bank governors pledged to apply these principles in a communiqué published on the website of the Ministry of Finance of Japan. It is expected that FATF standards will establish strict operating procedures for cryptocurrency transactions, and the new operating procedures may go beyond the basic KYC rules that most major exchanges now follow. However, this is only an estimate, and the specific rules will not be announced until June 21. In other words, on June 21, we will know what kind of regulation virtual assets will face.

What we are talking about here is also supervision, but we don’t know how it will be supervised and what the details of the supervision will be.

3. Speculation on regulatory details: Digital currency service providers are the “hardest hit areas”

However, according to the feedback from the G20 media, "establishing a cryptocurrency exchange registration center" may become one of the "magic weapons" for anti-money laundering. According to media reports, on the issue of cryptocurrency, the finance ministers and central bank governors of G20 member countries are expected to reach an agreement to establish a cryptocurrency exchange registration center to "prevent virtual currency money laundering." FATF said: At a minimum, virtual asset service providers should be required to obtain a license or registration in the jurisdiction where they are founded or where they do business... In addition, FATF also recommends that "virtual asset service providers should be supervised or supervised by competent authorities (not self-regulatory agencies)" and "countries should provide international cooperation related to virtual assets and virtual asset service providers."

Let's sort out the above news:

The main discussion points around cryptocurrencies at this year’s G20 summit were:

1. Establish a crypto exchange registration center

2. Cryptocurrency money laundering and terrorist financing regulation

3. Traditional large enterprises issue coins

This year, FATF’s main regulatory opinions on cryptocurrencies are:

1. Virtual asset service providers should be licensed or registered in the jurisdiction where their business location is located;

2. Virtual asset service providers should be supervised or monitored by a competent authority (not a self-regulatory body).

4. Don’t panic! Regulation is good for the industry

So in summary, FATF mainly implements supervision on cryptocurrencies, rather than blocking them. However, the outside world speculates that the supervision this time will be stricter. It is not like the rumors on the Internet that the server will be blocked, the cryptocurrency will be finished, and there are even earlier rumors that "Bitcoin founder Satoshi Nakamoto has been arrested"... These are all nonsense. You know, the transactions of digital currencies with main networks are all public and traceable on the chain, which is actually more conducive to anti-money laundering supervision to a certain extent.

Moreover, cryptocurrency regulation has long been a focus of attention and discussion, and many people have used such news to create panic whenever there is any regulatory news. We must know that regulation is not a bad thing. Regulation means that the industry is moving towards formalization and compliance, and that the rights and interests of investors will be protected. This is a good thing for both the industry and individuals.