Regulation

FATF’s proposed travel rule could force unprecedented collaboration among cryptocurrency exchanges

Quick Take

  • The Financial Action Task Force (FATF) is expected to release a finalized version of its guidance this month, and exchanges are debating one rule from the preliminary version
  • Paragraph 7(b) asks that exchanges share originator and beneficiary information during transactions between exchanges, which would require exchanges to find new frameworks for sharing such information
  • Some exchanges feel the rule is pushing crypto to operate under the same types of regulations as traditional finance, which overlooks the industry’s unique value

Crypto exchanges are fighting back against a rule change being proposed by European regulators that could overhaul the way they conduct business and force them to work together in an unprecedented way.

The so-called Financial Action Task Force (FATF) put forth a preliminary version of its coming guidance earlier this year which would require exchanges to come together and create common standards on exchanging customer information with regulators and other firms.