FATF – Global AML Rules That Impact Crypto, DeFi and Exchanges
When working with FATF, the Financial Action Task Force is an inter‑governmental body that sets anti‑money‑laundering (AML) and counter‑terrorist financing standards worldwide. Also known as the FATF, it drafts guidelines that countries and businesses must follow to keep illicit funds out of the financial system. AML, anti‑money‑laundering measures encompass transaction monitoring, reporting thresholds, and risk assessments. KYC, know‑your‑customer verification is the frontline tool that firms use to collect identity data and prove compliance. Together, FATF standards require crypto exchanges to adopt robust KYC, and they push DeFi platforms to consider on‑chain monitoring and licensing. In short, FATF influences how digital assets move across borders, how stablecoins are treated, and how regulators audit the ecosystem.
Why FATF Rules Matter for Crypto Users and Builders
One key semantic link is that FATF encompasses AML standards, which in turn require KYC processes on crypto exchanges. This creates a chain: FATF → AML → KYC → crypto exchanges. Another triple is that FATF demands compliance from DeFi protocols, forcing them to adopt on‑chain AML tools and possibly register as virtual asset service providers. A third connection is that stablecoins fall under the same FATF guidance, meaning issuers must implement strict governance and audit trails. Finally, the guidance influences how national regulators design licensing frameworks, which directly affects the way users can trade, stake, or lend tokens without running afoul of the law.
What does this mean for you? If you trade on a centralized exchange, you’ll see identity checks, transaction limits, and periodic reports that trace back to FATF’s recommendations. If you explore DeFi, you may encounter projects that offer “compliant bridges” or “AML‑ready smart contracts” to survive regulatory scrutiny. Even airdrop participants need to watch out for KYC requirements, as many token distributions now double‑check beneficiary identities to stay on the right side of FATF rules. Understanding these relationships helps you navigate the space with confidence, avoid accidental violations, and pick platforms that are built with compliance in mind.
Below you’ll find a curated list of articles that break down FATF‑related topics—from self‑sovereign identity solutions that aim to satisfy KYC, to detailed guides on crypto consumer protection in various jurisdictions, and analyses of how emerging exchanges plan to meet FATF standards. Use these resources to see how the global AML framework shapes the everyday decisions you make in the crypto world.