'Not Everyone Is Happy but We Have to Move on,' Some Challenges to the FATF's New Guidance

Is it going to be good for the crypto industry as a whole? Cointelegraph asked the FATF Secretariat and different VASPs at the V-20 about their thoughts on the new rule.

Travel ruleThe travel rule refers to section 7(b) in the Interpretative Note to Recommendation 15 in the FATF guideline, which requires VASPs to collect and transfer customer information during transactions.

The FATF has said that local authorities and VASPs have one year to come up with country-specific rules based on the travel rule.

Technical challenges There are at least three challenges brought about by the travel rule that various VASPs at the V-20 mentioned to Cointelegraph.

Can crypto startups survive? At the moment, no technical solution has been brought forward to implement the new rule.

Christie acknowledged the idea of financial privacy and noted that the new rule will invite "some fundamental challenges that the entire industry is going to face from a philosophical standpoint.

According to a person who participated in one of the closed sessions at V-20, a crypto industry member suggested that the FATF use public data already available on the blockchain to have AML, thus creating a system in which the travel rule doesn't have to be applied.

For him, the travel rule is the same rule adopted in traditional finance industries in the 20th century.

In an interview with Cointelegraph, Neylan from the FATF acknowledged that the crypto sector is "new to the regulation with first supervisory body and first standard setting body to be applying rules" and therefore they thought "they needed more explanation.

Another participant of the V-20 told Cointelegraph, "Not everyone likes the new rule but we have to move on.