The Group of Seven (G-7) advanced economies must take the lead in implementing recommendations by the Financial Action Task Force (FATF) to combat illicit financial flows through crypto, the president of the global financial crimes watchdog said in a letter on Thursday.
The strongly-worded message titled "An end to the lawless crypto space" was published ahead of a meeting of G-7 leaders in Hiroshima, Japan starting Friday.
The FATF has urged countries to implement its controversial "travel rule" that requires crypto service providers to collect and share information on transactions above a certain threshold, designed to curb money laundering and the financing of terrorism through digital assets.
"Around the globe, countries have made progress in implementing most of the standards; however, progress on implementing FATF’s updated requirements on crypto assets has been relatively poor," Kumar said, adding that 73% of countries are still "non-compliant or only partially compliant" with the watchdog's standards.
"Countries need to take urgent action to shut down lawless spaces, which allow criminals, terrorists and rogue states to use crypto assets," Kumar said.
Although analysts estimate around 0.1% to 15.4% of crypto transactions to be unlawful, the FATF has said these may be too low.
G-7 countries taking the lead in "fully and effectively implementing FATF’s global standards is crucial to our collective success," Kumar said.
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