The Financial Action Task Force (FATF) has been looking to stick its fingers into the crypto world for quite some time now, and last week it released a list of demands for regulatory compliance. Crypto exchanges and wallet providers will be required to give detailed information on who is sending and receiving certain amounts of crypto. In a bid to make nice with regulators, Ripple has agreed to put every XRP address through a series of risk assessments to satisfy the FATF regulations.
What Does This Mean for Me?
FATF is looking to stop money laundering from taking place, so unless you’re taking part in suspicious activity then nothing will happen at all. However, if you take part in certain privacy protecting practices – such as coin mixing and clustering – then you could be assigned a higher risk score and potentially have transactions flagged when you move your XRP to an exchange. If an exchange that also takes part in FATF’s regulations, then your account could be frozen while you prove source of funds and an investigation is conducted.
Not All Bad News
While you might think this is a huge invasion into your privacy, nobody will know who you are or where you live. FATF will only know whether you’re possibly a money launderer – far less than banks and the US government already know with the current financial system under FATCA regulations. However, in the case of stolen XRP wallet holders will be known and easier to identify. This could be a huge help in the case of the GateHub hack where 24 million XRP was stolen. The XRP is finally on the move, but these new regulations could stop it in its tracks before the hacker can cash out.
Ripple Bowing Down to Regulators
Ripple isn’t the best loved cryptocurrency project out there, and regulators know it. There are multiple lawsuits currently open against Ripple and it’s not doing itself any favors by covering up its tracks. Back in November, Ripple was caught changing the wording on its website to satisfy the SEC and hide from an impending ruling against its token – XRP. The move to bow down to FATF requirements could be a move to help Ripple be looked upon more favorably by judges in its many court cases.
The move to assess every XRP wallet for money laundering risks isn’t one Ripple made lightly, and there will be very little invasion of privacy. If you don’t want the FATF to snoop on your XRP wallet, consider swapping your XRP into a different altcoin where the project has similar values and potential – like Stellar.
