Global Cryptocurrency

Crypto companies in the UK need to follow new rules to stop illegal money activities. They have only a few days to do this. But following these rules is hard because different places follow the rules differently. Crypto companies want better instructions and more time to follow these rules.Crypto companies in the UK are facing a tight deadline to put in place the &#34;travel rule,&#34; a measure aimed at stopping money laundering. However, the rule&#39;s inconsistent application worldwide is posing challenges for these companies to meet the requirements, according to experts in the field who spoke to CoinDesk.The Financial Action Task Force (FATF), an international organization that sets rules, has established standards that include a rule demanding companies to identify the real names of individuals involved in transactions. This particular requirement has sparked debates within the crypto industry. The unique characteristics of cryptocurrencies, like self-controlled wallets not managed by regulated entities, have created specific issues in adapting to this rule.While some consider the rule vital to combat illicit financial activities and enhance the reputation of cryptocurrencies, only 35 jurisdictions have passed the necessary laws by June, as noted by FATF. The organization expressed significant concern about the failure to implement this rule.Crypto companies also face a challenge when they need to collect information about who their customers are interacting with in other countries. This can be tricky, as some places follow the rule while others don&#39;t. Ilya Brovin, who works at a verification platform called Sumsub, explained this as a &#34;sunrise issue&#34; for the law.He said, &#34;Imagine if the rule is enforced in one place, but not in another. How can you make sure that companies in your area follow the rule if the companies they need to work with are not following it?&#34; The travel rule will help banks and other big institutions know which crypto companies are trustworthy.Since this is a new area, many people in the industry have lots of questions. But in most places, the people who make the rules haven&#39;t given clear instructions yet. These new rules in the UK will start on September 1st. Groups that represent companies and a lawyer named Claire Cross want the same rule to be followed everywhere.Cross said, &#34;If the rules are not the same everywhere, there could be problems that criminals take advantage of.&#34; She also hopes that other countries will quickly follow the example of the UK&#39;s financial authority, the FCA, in making and following these rules.The issue is that even though laws have been made in 35 different places, they haven&#39;t started working yet. This includes the nearby European Union, where the new laws will only start in 2024.Even when these laws are put in place, they are not the same everywhere. For example, in Canada, companies need to write down the addresses of the people getting the money. But in the UK, they don&#39;t have to do that. This causes a problem when companies are moving money between Canada and the UK.Caterina Veloso, who helps a group called CryptoUK, explained this. She said that the UK&#39;s authority, the Financial Conduct Authority, has been good at talking to companies and trying things out. But the guidelines they gave in August need to be more clear.To make things better, Veloso is asking a group called the Joint Money Laundering Steering Group (JMLSG) for help. This group gives advice to the people who make the rules. CryptoUK will be sending them a message to ask for more details on how to handle money coming in from other places and how to work with different kinds of rules.But as the new rules start in just one week, she hopes that the FCA will understand the difficulties companies are facing.&#34;I wish the people who make the rules can understand these problems,&#34; Veloso said, mentioning that there needs to be some flexibility in dealing with these issues. She also talked about how important it is to balance this with keeping people&#39;s private information safe. &#34;There might be disagreements, and we will have to see over time how they get resolved.&#34;The FCA hasn&#39;t responded yet to a request from CoinDesk about whether they will be flexible. But from what the FCA has said before, it seems like they won&#39;t be too easy on companies when it comes to things like money laundering, where the punishments for not following the rules are usually very strict.In a statement on August 17, the FCA said, &#34;Just a little effort or not trying at all from September 1 won&#39;t be enough.&#34; They also mentioned that they will take quick and strong action if crypto companies don&#39;t meet their travel rule expectations.

Troubles with the UK's Travel Rule show that crypto faces a big challenge worldwide.

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