The Paris-based Financial Action Task Force (FATF), an organization which acts as the standard-setter for anti-money laundering (AML) standards around the globe, said it is closely watching the development of Facebook’s planned cryptocurrency, Libra, according to a report by Reuters.
Xiangmin Liu, the president of FATF, said: “We want to make sure that if there are significant risks, they need to be addressed.”
The Facebook cryptocurrency could be launched as early as next year, and regulators and lawmakers around the globe are skeptical about it due to concerns over money laundering and the effect it could have on the existing global financial system.
A senior U.S. Treasury official said Libra must meet the highest standards for AML properties and have safeguards against funding terrorism.
When Facebook announced Libra, it shined a new light on crypto and its regulation protocols, especially since it is a global currency and rules vary from country to country.
In June, the FATF urged countries to closely examine cryptocurrency exchanges and the rules that govern them. Liu warned that illegal use of cryptocurrency is growing.
“The anonymity afforded by virtual assets is being exploited by serious criminals,” Liu said. “These activities are likely to be growing quickly, as law enforcement agencies are only seeing the tip of the iceberg.”
The way cryptocurrency is traded, Liu said, is hard to enforce in terms of illegal activity.
“We have talked about finding suspicious activity as being like finding a needle in a haystack,” he said. “Well, that haystack is getting bigger and bigger, and is moving all the time.”
Libra is Geneva-based, and U.S. Under Secretary of Terrorism and Financial Intelligence Sigal Mandelker told Geneva reporters that all cryptocurrency projects operating in the U.S. will be required to comply with regulatory standards to prevent money laundering and terrorism financing.
“Whether it’s bitcoin, Ethereum, Libra, our message is the same to all of these companies: Anti-money laundering and combating the financing of terrorism has to be built into your design from the get-go,” she said.