This edition of Bite-size Briefings, a series of briefings that take a “bite-size” look at international trends in different jurisdictions, explores the regulation of crypto (or digital assets) and, in this context, the development of anti-money laundering (AML) supervision in the UK, the US, Hong Kong SAR, Singapore and Thailand.
While each jurisdiction follows its own approach taking into account its existing regulatory frameworks and risk appetites for customer protection and financial crime etc., these are consistent with the principles set out by international standard-setting bodies. The G20-established Financial Stability Board (FSB) has published a number of reports, including its May 2019 work on the regulatory approaches toward cryptoassets and the potential gaps, for example, with respect to investor protection, market integrity and AML, and, more recently (referenced below), enhancing cross-border payments with stablecoin. For its part, in June 2019, the Financial Action Task Force (FATF) published guidance on a risk-based approach to virtual assets and asset service providers, having clarified in 2018 that its Recommendations apply to financial activities involving these types of assets. The guidance seeks to help regulators develop effective regulatory and supervisory responses, and help businesses understand their AML-related obligations, including how they can best comply.