The Financial Action Task Force (FATF), a global intergovernmental group focused on helping countries find ways to address money laundering and terror financing, is taking on the world of cryptocurrency. FATF has published a revised draft guidance for virtual assets (VAs) and virtual asset service providers (VASPs) and is planning to finalize that guidance at its June 2021 meeting, with the explicit purpose of obligating VAs and VASPs to implement anti-money laundering and countering the financing of terrorism (AML/CFT) programs.

While the FATF guidance is non-binding, failure to adopt its framework could have adverse diplomatic and financial consequences, and therefore will influence how over 200 countries handle DeFi, NFTs and virtual-assets. It will also likely have a significant influence on the international dialogue pertaining to DeFi and NFTs where, up to now, there has been little or no international coordination for regulating these areas of innovation.

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