A global watchdog, Financial Action Task Force (FATF), has directed countries to tighten the oversight of cryptocurrency exchanges in order to stop digital coins being used to launder cash.
Cryptocurrency firms will be subjected to rules to prevent the abuse of digital coins such as Bitcoin for money laundering, a global watchdog said, the first worldwide regulatory attempt to constrain the rapidly growing sector.
FATF which was set up 30 years ago to tackle money laundering, told countries to tighten oversight of cryptocurrency exchanges, to stop digital coins being used to launder cash, as per the agency reports.
The move by FATF, which groups countries from the United States to China and bodies such as the European Commission, reflects a growing concern among international law enforcement agencies that cryptocurrencies are being used to launder the proceeds of crime.
Countries will be compelled to register and supervise cryptocurrency-related firms such as exchanges and custodians, which will have to carry out detailed checks on customers and report suspicious transactions, FATF said in a statement.
“This will enable the emerging FinTech sector to stay one-step ahead of rogue regimes and sympathisers of illicit causes searching for avenues to raise and transfer funds without detection,” US Treasury Secretary Steven Mnuchin told a FATF meeting in Florida, according to remarks posted on the US Treasury website.