FATF: "The U.S. has achieved a high level of compliance with AML and CTF recommendations."

   FATF assessed U.S. crypto asset regulation and reported that the country has reached a "high level of compliance" with previously revised AML and CTF recommendations.

The International Financial Action Task Force (FATF) has published its assessment of compliance with current U.S. banking rules, laws and regulations with the recommendations issued by FATF last summer.

Recall that in June 2019 FATF published the final version of the recommendations to prevent money laundering (AML) and financing of terrorism (CTF) through cryptov currencies.

FATF noted that the U.S. has not achieved full compliance with the recommendations, but the analysis showed only "minor shortcomings" in the existing regulation. For example, U.S. financial service providers need to keep detailed records of transactions worth $3,000 or more, while FATF recommends tracking transactions worth $1,000 or more.

"This higher threshold clearly cannot ensure low AML/CTF risks," FATF notes.

U.S. regulators are also lagging behind in the investigation of cases involving companies that provide cryptographic services, FATF reports. The U.S. strategy "does not specifically identify higher-risk cryptographic service providers," which makes their various audits of major exchanges and P2P networks unsatisfactory.

"Thus, it's not quite clear whether the current approach can be considered risk-focused enough, especially since only 30% of all listed cryptographic service providers have been audited since 2014," FATF says.

Legislative gaps may also allow such companies to evade compliance, FATF says. In addition, U.S. firms that serve U.S. non-residents do not appear to be covered by existing legislation.

In its report, FAFT also praised recent U.S. efforts to regulate cryptographic assets, such as FINCEN recommendations explaining how anti-money laundering laws apply to Bitcoin and other cryptographic currencies.

More and more countries are seeking to bring their legislation into line with FATF requirements. In December, the Verkhovna Rada of Ukraine passed in the second reading the draft law on prevention and combating money laundering according to FATF standards, which also includes cryptographic assets.

In addition, in February, finance ministers and central banks of the G20 countries insisted on more active implementation of standards that would force crypt currency exchanges to disclose information about users.