FATF Clarifies Position: Countries Not Required to Indiscriminately Ban Virtual Assets, says Global Watchdog

The Financial Action Task Force (FATF) has responded to reports claiming that it requires countries to indiscriminately ban cryptos and virtual asset service providers . The global money laundering watchdog stated that it does not impose such a condition in an email . The clarification came after Pakistan’s finance minister reportedly suggested that the FATF set a condition to keep the country off its “grey list” by banning cryptocurrencies in Pakistan .

Pakistan’s Finance Minister’s Statement Misinterprets FATF Requirements, says Watchdog

Reports had emerged that Pakistan’s Minister of State for Finance and Revenue Aisha Ghaus Pasha, claimed that the FATF had mandated a ban on cryptocurrency legalization in Pakistan . However the FATF emphasized that this interpretation was incorrect and they stated that it does not require countries to take such measures .

Cryptocurrency Ban in Pakistan Not a Condition Set by FATF, Clarifies Global Money Laundering Watchdog

The statement made by Pakistan’s finance minister was perceived as a fresh ban on cryptocurrencies by the country’s government . Despite the economic challenges faced by Pakistan including a volatile political situation, the minister reportedly insisted that cryptocurrencies would never be legalized in the country . However the FATF clarified that its “grey list” designation is aimed at addressing strategic deficiencies in anti-money laundering and counter-terrorism financing regimes and it does not explicitly require countries to ban virtual assets or virtual asset service providers .

FATF Stresses Understanding Risks and Implementing Preventive Measures in Crypto Sector

The FATF highlighted its approach of encouraging countries to understand the risks associated with money laundering and terrorist financing in the crypto sector . It expects countries to implement necessary measures such as issuing licenses or registering exchanges to supervise the sector effectively . The FATF also stressed the importance of applying preventive measures including customer due diligence, record keeping, reporting suspicious transactions and adhering to the travel rule, which requires sharing information on certain threshold-crossing crypto transactions .

Pakistan’s Stance on Cryptocurrencies Not Directly Imposed by FATF, Highlights Volatile Economic Situation

While the FATF declined to directly address the statements made by Pakistan’s finance minister it clarified that countries have the discretion to prohibit virtual assets and virtual asset service providers if they choose to do so . The Pakistani government’s anti-crypto stance which contradicts the conditions set by the FATF according to reports comes at a time when the nation’s economy is reeling due to a volatile political situation . The ongoing situation in Pakistan adds complexity to the discussion surrounding cryptocurrency regulations and their impact on the country’s financial landscape .