New certification standards for Defi and NFT have been given by the FATF, although the community has expressed dissatisfaction with the move. The reason for this may be found in today’s crypto headlines.
In response to the FATF’s new legislation covering NFT and Defi, as well as virtual asset providers, several internet users have expressed dissatisfaction with the inclusion of Defi and NFT provisions. A week after the Financial Action Task Force (FATF) published its final cryptocurrency guidelines, the anti-money laundering organisation updated the rules to include clear explanations for virtual asset processing companies. Accord to the plan, VASPS are required to adhere to the same regulations as traditional financial institutions.
The Financial Action Task Force edited the following document: 1 / LONG-TERM TOPIC OF CRYPTOCURRENCY + DEFI GUIDELINES
TL;DR: THIS IS NOT A GOOD SITUATION.
According to my initial reading, the FATF saw a world in which decentralised + permissionless systems – preferably prevented – were prevalent. HTTPS://T.CO/JG2C0O9GVZ
MÜLLER (@MILLERCWL) will be celebrating his birthday on October 28th, 2021.
In order to prevent money laundering and terrorist financing, organisations that provide services related to stablecoins, decentralised financial applications, peer-to-peer transactions, and other similar services may need to closely monitor their customers’ logins and the source of funds. This is in order to ensure compliance with applicable regulations and controls in order to combat money laundering and terrorist financing. The FATF’s guidelines for peer-to-peer transactions specify that countries can impose activities such as record-keeping or restricting transfers to certain addresses, and it also indicates that countries can impose the following:
According to the report, “Countries and virtual asset platforms (VASPs) should make an effort to understand which types of P2P transactions present a higher or lower risk, as well as the drivers of P2P transactions and their various risk profiles.”
Although it should come as no surprise, the FATF standards are aimed at enhancing regulatory oversight and integrating the cryptocurrency industry with the traditional financial system, which has been in operation for a long time. However, when the international panel brought up the themes of NFTs and DeFi, it sparked considerable discussion among those in the community who were familiar with the message. According to reports in the press, writers, owners, and operators who have a role in DeFi agreements may be compelled to adhere to the regulator’s rules. These tokens are included in the FATF definition of virtual assets, according to the instructions for the NFT. However, the FATF standards apply to the NFT regardless of the word used in the instructions. DeFi Education Foundation Policy Director Miller Whitehouse-Levine sharply criticised the DeFi answer in a tweet, indicating that the DeFi community is not satisfied with the new standards as a whole.