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"FATF makes it clear that it takes an expansive view on virtual asset and VASP definitions, and that most existing arrangements have some party involved that would qualify as a VASP, either at the development or launch stage of the project. Draft guidance specifies that DApps usually have a "central party" involved in creating and launching an asset, setting parameters, holding an administrative key or collecting fees, and such entities involved with the DApp may qualify as VASPs."

The Financial Action Task Force (FATF) updated its 2019 Guidance for a Risk-Based Approach for Virtual Assets and Virtual Asset Service Providers (VASPs). The FATF standards require countries to assess and mitigate their risks associated with virtual asset financial activities and providers; license or register providers and subject them to supervision or monitoring by competent national authorities. VASPs are subject to the same relevant FATF measures that apply to financial institutions. This guidance is intended to help countries and VASPs understand their anti-money laundering and counter-terrorist financing obligations, and effectively implement the FATF's requirements as they apply to this sector. The guidance provides relevant examples and potential solutions to implementation obstacles.

The Financial Action Task Force (FATF) published an update on implementation of its standards on virtual assets (VAs) and virtual asset service providers (VASPs), with a focus on the travel rule. The travel rule requires VASPs to collect and share with each other personal data on participants (both senders and receivers) in transactions exceeding USD/EUR 1,000. In other words, the personal data of the transacting parties is supposed to "travel" along with their transfers. The report that notes only 11 of 98 surveyed jurisdictions are enforcing and supervising it. The also report highlights the continued need to monitor monitor the growth of, and illicit financing risks associated with DeFi and NFTs markets and unhosted wallets.

The Financial Action Task Force (FATF) updated its Guidance on the risk-based approach to virtual assets (VAs) and virtual asset service providers (VASPs). These changes aim to maintain a level playing field for VASPs, based on the financial services they provide in line with existing standards applicable to financial institutions and other AML/CFT-obliged entities, as well as minimizing the opportunity for regulatory arbitrage between sectors and countries.

The Financial Action Task Force (FATF) looks to be going after decentralized finance (DeFi) applications in their recent draft guidance released. When it comes to DeFi platforms, the FATF said its standards may not apply to the underlying software or technology, but entities involved with the decentralized application (DApp) such as owners or operators may now be considered virtual asset service providers (VASPs). Virtual asset (VA) escrow services, including services involving smart contract technology, brokerage services, order-book exchange services, advanced trading services, and custody providers will all considered VASPs.

The Caymans' Ministry of Financial Services kicked off Phase One of its anti-money laundering (AML) and countering the financing of terrorism (CFT) regulatory framework for virtual asset service providers (VASPs). Phase Two, slated to come into force in June 2021, will introduce licensing requirements and prudential supervision for VASPs. https://www.mfs.ky/news/government-commences-framework-for-virtual-asset-service-providers/

The Financial Action Task Force (FATF) has a plenary meeting scheduled on June 24 to assess the progress of Virtual Asset Service Providers (VASPs) worldwide in enforcing the organization's "travel rule". The guidelines are not legally binding, but they can be effective because any nation that does not comply with them by the deadline may be excluded from the global financial network. Out of the over 200 countries that make up the FATF, only 20 or so have issued regulations covering the travel rule, although the remaining countries are making significant progress, according to CoolBitX CEO Michael Ou.

Lawmakers in Singapore approved the Financial Services and Markets Bill 2022, which further expanded the jurisdiction of the Monetary Authority of Singapore (MAS) to virtual asset service providers (VASPs) doing business outside Singapore. Under the previous regulatory regime, the MAS only had authority over VASPs based in the country and offered their services locally. This led to some regulatory loopholes in which a firm could claim to be regulated by the MAS, but not be directly supervised by the regulator.

Namibia's President Hage Geingob officially signed into law the Namibia Virtual Assets Act 2023 which covers the regulation of digital assets, cryptocurrencies and virtual asset service providers (VASPs) in the country. It establishes a framework for licensing and regulating VASPs, and appoints a regulatory authority responsible for supervising these providers and their activities. The Finance Ministry will determine the operative date for the law. http://www.lac.org.na/laws/2023/8143.pdf

On June 22, Namibia's lower house of parliament passed legislation to regulate digital assets, cryptocurrencies and virtual asset service providers (VASPs) in the country. It aims to establish a framework for licensing and regulating VASPs, and appoint a regulatory authority responsible for supervising these providers and their activities. The bill is now awaiting official publication before coming into effect.

Dubai's Virtual Asset Regulatory Authority (VARA) has issued new guidelines for virtual asset service providers (VASPs) operating within the emirate. VARA's "Full Market Product Regulations" include four compulsory rulebooks and activity-specific rulebooks that lay down the rules for operating VASPs. The rules excluding those operating under the Dubai International Financial Centre (DIFC), a free zone with its own regulator. https://www.vara.ae/en/#0

The Financial Action Task Force (FATF) renewed its request for countries to implement the "travel rule", explaining that "many" member states have failed to implement the rule. The rule requires virtual asset service providers (VASPs) to communicate the personally identifiable information (PII) of senders to the VASPs of recipients and vice versa whenever the amount transacted is above $1,000. FATF claims that the travel rule is a "key requirement to prevent funds being transferred to sanctioned individuals or entities", and noncompliance "creates significant loopholes for criminals to exploit". Closing the gaps in global regulation of virtual assets is an urgent priority.

The Financial Action Task Force (FATF) has agreed on an action plan to drive the "timely implementation" of its global standards for crypto. The FATF noted that many countries have failed to implement its norms, including the "travel rule," which requires virtual asset services providers (VASPs) to collect and share information of crypto transactions. FATF published its updated standards for crypto in 2019, but last June, it said only 11 of 98 surveyed jurisdictions were enforcing the travel rule and urged them to act faster. In that regard the FATF's plenary agreed to a road map to strengthen implementation of FATF standards on virtual assets and VASPs, which will include a stocktaking of global current levels of implementation to e published in the first half of 2024.

The Bahamas' Parliament passed the Digital Assets and Registered Exchanges Act, 2024 (DARE 2024) 1.5 years after the collapse of Bahamas-headquartered FTX. It will tighten requirements for virtual asset service providers (VASPs) and put in place a full licensing regime. VASPs will be required to have a trade surveillance system in place, and insider trading, unlawful disclosure of information and market manipulation is prohibited. https://laws.bahamas.gov.bs/cms/images/LEGISLATION/BILLS/2024/2024-0019/2024-0019.pdf

Twenty-five U.S.-based virtual asset providers (VASPs) have come together to publish a white paper on an industry-wide solution to travel rule compliance. The solution takes a centralized approach, setting up a "bulletin board" to locate counterparty information and point-to-point information transmission for the required data. In essence, the U.S. Travel Rule Working Group (USTRWG) is proposing a kind of hub through which they can identify customer information and use point-to-point communication channels to transmit that data.

As expected, the Financial Action Task Force (FATF) standards released Friday include a controversial requirement that "virtual asset service providers" (VASPs), including crypto exchanges, pass information about their customers to one another when transferring funds between firms.

"Hong Kong continues to refine the manner in which cryptoassets and activities are regulated. In 2019, the Hong Kong Securities and Futures Commission (SFC) commenced an opt-in licensing regime for virtual asset trading platforms (Opt-in Regime).[1] In 2020, the Financial Services and the Treasury Bureau (FSTB) of the Government of the Hong Kong Special Administrative Region launched a consultation (Consultation) on proposals to enhance anti-money laundering and counter-terrorist financing (AML/CTF) regulation in Hong Kong under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO).[2] One of the key proposals includes a new wide-ranging licensing regime for virtual asset services providers (VASPs), which will also be regulated by the SFC. The changes are amongst others intended to align Hong Kong's regulations with the latest requirements and recommendations of the Financial Action Task Force."

The Bangko Sentral ng Pilipinas (BSP) released new guidelines for the virtual asset service providers (VASPs) operating in the country, imposing many new restrictions and mandating licenses for operations. The new framework aims to curb money laundering and terror financing using digital currencies. The document highlighted that the regulations are in line with the recommendations of the Financial Action Task Force (FATF).

The KYC/AML requirements of the VASPs would largely block off the potential inclusion of the 1.7+ billion who are already unbanked, creating simply a new digital version of the exclusive system we have now. Unhosted wallets could help solve this problem by catering to refugees, small-holder farmers and other vulnerable populations around the world by facilitating smaller transaction amounts and account balances; activities consistent with the financial reality in many of the places where we work.

Binance has deployed CipherTrace Traveler to enable the exchange's compliance with global "travel rule" regulations. Traveler is designed to support Virtual Asset Service Providers (VASPs), including cryptocurrency exchanges, custody providers, OTC trading desks, banks and other financial institutions, to achieve compliance with the Financial Crimes Enforcement Network's (FinCEN) and the Financial Action Task Force's (FATF) travel rule regulations.