Cryptocurrency Exchanges Will Face Day of Reckoning on June 21st

On June 21st, the Financial Action Task Force will be releasing a report clarifying virtual assets. The multi-government effort will provide recommendations to stop money laundering and terrorist financing. 

The cryptocurrency community has long wished regulatory clarity, but it seems like it soon may be coming from where they least expect it.

On June 21st, the Financial Action Task Force (FATF) will be releasing a notice outlining new guidelines for cryptocurrency exchanges, blockchain-related businesses, and custodial services. Much of the future of US cryptocurrency

According to Eric Turner, director of research as Messari Inc:

“Their recommendation could have a much larger impact than the SEC or any other regulator has had to date.”

This much is true. The guidelines will likely affect cryptocurrency exchanges like Coinbase and Kraken to collect additional information on their customers. The added compliance issues will undoubtedly cause headaches and added costs for these companies, since documenting all this information is technically difficult.

John Roth, Chief Compliance Officer at Bittrex, said that such an undertaking will prove to be difficult.

“It’s either going to require a complete and fundamental restructuring of blockchain technology, or it’s going to require a global parallel system to be sort of constructed among the 200 or so exchanges in the world,” Roth said. “You can imagine difficulties in trying to build something like that.”

It remains to be seen how such changes will affect the security token industry, but it will likely be significant. After all, the SEC is currently backlogged with pending approvals and the space has been stalled for some time.

The cryptocurrency space has long sought compliance clarification. However, the future FATF notice will likely not provide the clarify most are looking for: just more unnecessary oversight rather than approvals for technological growth.

Do you believe the FATF notice on June 21st will shake up the cryptocurrency world? Let us know your thoughts down below. 

Image courtesy of Coingape.