; The Year in Review and 2020 Regulatory Timelines - ARGOS KYC

Argos KYC News & Insights

The Year in Review and 2020 Regulatory Timelines

2019 has been an eventful year for the cryptocurrency industry and its regulators. A lot of laws and regulations regarding anti-money laundering have been introduced, and you might be wondering how they will impact your business in 2020. Here are a few things you should know before the new year comes.

Twenty-nine years after the issuance of the original forty Recommendations, the Financial Action Task Force (FATF) issued an Interpretive Note to Recommendation 15 that further clarifies the FATF’s previous amendments to the international standards relating to virtual assets. The note depicts how member countries and obliged entities shall comply with the relevant FATF Recommendations to prevent the misuse of virtual assets for money laundering and terrorist financing.

October 2018 | Revision of Recommendation 15 and addition of two new definitions in the Glossary
Revision of R.15 and addition of new definitions “virtual asset” and “virtual asset service provider” in order to clarify how AML/CFT requirements apply in the context of virtual assets.

June 2019 | Addition of Interpretive Note to Recommendation 15
Insertion of an Interpretive Note that sets out the application of the FATF Standards to virtual asset activities and service providers.

Following the amendments to the FATF Recommendations, countries have started to apply the relevant measures to virtual assets and virtual asset service providers.

FATF’s decision has paved the way for the acceleration of regulatory developments all around the globe. The fifth Anti-Money Laundering Directive (5AMLD), being introduced in January 2020, will require virtual asset service providers in EU territory to comply with a variety of AML regulations. The AMLD5 requires VASPs to abide by anti-money laundering laws, and competent authorities to monitor whether VASPs satiate compliance requirements.

– VASPs are subject to AML/CFT requirements
– VASPs shall be registered
– Authorities shall monitor movements of virtual assets
– VASPs shall maintain customer’s KYC and AML screening records for five years after the end of a business relationship

In the United States, lawmakers are discussing the introduction of a new bill “Crypto-Currency Act of 2020.” The draft was it to be passed, which would bring regulatory clarity. It divides cryptocurrencies in different categories and assigns federal agencies to regulate respective cryptocurrencies.

Three categories of virtual assets

Crypto-commodity: economic goods or services that a) has full or substantial fungibility, b) the markets treat with no regard for who produced the goods or services, and c) rests on a blockchain or decentralized cryptographic ledger
Crypto-currency: representations of United States currency or synthetic derivatives
Crypto-security: all debt, equity, and derivative instruments that rest on a blockchain or decentralized cryptographic ledger

Federal Crypto Regulator for each category

The Commodity Futures Trading Commission (CTFC) — Crypto-commodities
The Securities and Exchange Commission (SEC) — Crypto-securities
The Financial Crimes Enforcement Network (FinCEN) — Crypto-currencies

The arrival of tighter regulations in 2020 may have the industry-wide effect of brushing off illegitimate businesses and leaving the compliant players to grow. It’s time for VASPs to adjust themselves to the new regulatory environment.


“Create A World Where Good People Transact Safely and Keep The Bad People Out.”