FATF decided to tighten control over the bitcoin industry, despite experts' warnings about the adverse effects of

The Financial Action Task Force on Money Laundering (FATF) decided to tighten the regulation of the cryptocurrency industry, in particular, to oblige the bitcoin exchanges and other cryptocurrency service providers (VASPs) to comply with AML and CFT (countering the financing of terrorism) procedures similar to traditional financial companies.

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So, despite the criticism of the proposals and warnings about the adverse consequences for the industry, the group decided that bitcoin exchanges should exchange user data when they make transactions between sites.

VASPs must provide each other with the following data:

• the name of the sender and the data on his digital wallet;
• the recipient's name and data on his digital wallet;
• physical address of the sender, his passport data or user ID, which binds him to the company, date or place of birth.

Regulators of member countries of this intergovernmental organization will have to ensure compliance with these requirements and ensure that all VASPs share and store such information. Business and governments have exactly 12 months to implement the recommendations, and the first FATF check will be carried out in June 2020.

Many analysts, including the company Chainalysis , tried to convince FATF that in the blockchain industry it is rather difficult, if possible at all, to comply with the same standards as in the banking sector. They warned the organization that a cryptocurrency business may partially go into the shadows, and the privacy of users and the effectiveness of law enforcement operations may suffer.

However, now any provider of cryptocurrency services, an individual or a legal entity, will have to go through a licensing or registration procedure in their jurisdiction. Thus, according to the FATF, the competent authorities will have to make sure that the criminals are not the beneficiaries of VASPs.

If the service provider intends to change the ownership structure or organization of the business, it will need to get approval from the regulator.

It is noteworthy that the recommendations of FATF touched and mixing services. So, VASPs should mitigate the risks associated with such transactions, which obfuscate senders and recipients, and if this is not possible, then providers should not be allowed to do so.

In addition, VASPs must freeze the funds of users that are included in the sanction lists.

Note that there are 37 member countries in the FATF and they are not obliged to follow the recommendations, however, in this case they will be blacklisted and face an outflow of foreign investment.

Recall earlier in the Russian Federation have prepared proposals for the regulation of cryptocurrency in accordance with the requirements of FATF.

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