Recently, the FATF released finalized guidance on crypto businesses that extend beyond the basic “know your customer” (KYC) requirements. In addition to these pre-existing requirements, there is now an added requirement to pass customer information when transferring funds, much like banks are required to do.
The FATF stated that countries should make sure that when crypto businesses send money, that they:
“… obtain and hold required and accurate originator [sender] information and required beneficiary [recipient] information and submit the information to beneficiary institutions … if any. Further, countries should ensure that beneficiary institutions … obtain and hold required (not necessarily accurate) originator information and required and accurate beneficiary information …”
This development requires that information for each transfer include:
(i) originator’s name (i.e., the sending customer);
(ii) originator’s account number where such an account is used to process the transaction (e.g., the VA wallet);
(iii) originator’s physical (geographical) address, or national identity number, or customer identification number (i.e., not a transaction number) that uniquely identifies the originator to the ordering institution, or date and place of birth;
(iv) beneficiary’s name; and
(v) beneficiary account number where such an account is used to process the transaction (e.g., the VA wallet).
Although these FATF guidelines are not binding and serve as recommendations, countries that fail to comply with these standards can be placed on a blacklist, consequently impacting their ability to engage in foreign investment.
Concerned that these developments might affect your business model? Reach out to our office at: firstname.lastname@example.org to learn more about our legal services.