G20 Summit to Focus on Global Crypto Framework

In Brief

• The last summit under the presidency of Indonesia will take place in Bali on Nov. 15.
• 20% of the terrorist attacks have been crypto-financed: A senior UN official.
• The countries that do not ensure anti-money laundering and terrorist financing rules on crypto providers could be added to a “gray list.”

The upcoming G20 summits are expected to focus on crypto regulation. This is due to money laundering and terrorist funding with cryptocurrencies.

The last G20 summit under the presidency of Indonesia will take place on Nov. 15. Later, India will take up the presidency of the future G20 summits for one year from Dec 2022.

Ahead of the G20 summit, the finance minister of India, Nirmala Sitharaman, has shared her thoughts on regulating crypto. Last Tuesday, while addressing the Indian Council for Research on International Economic Relations (ICRIER), she quoted that:

We have not come out with any plan to regulate digital assets. The agenda of cryptocurrency regulation will be brought in G20 Meeting.

Illicit activities funded by cryptocurrency
Svetlana Martynova, a senior official at the UN, believes that the prevalence of crypto-funding of terrorist activities may have increased by four times in recent years. She estimates that 20% of the terrorist attacks have been crypto-financed.

Additionally, according to a Chainalysis report, illicit entities received nearly $10 Billion this year. While in 2021, it was a record high, with illicit entities receiving more than $15 Billion.

India to prioritize crypto regulation in the G20 summit
You don’t know what the trail leads you to. Is it drug funding? Is it terror-funding or is it just gaming? So that regulation cannot be successful if any one country does it. We have not come up with any plans as yet. So we need to have all the members of the G20 on board to see how best it can be done.

Nirmala Sitharaman
India has maintained a strict staunch against cryptocurrencies. Hence, as a host, they are most likely to bring up the discussion on crypto regulation at the summit. Earlier, the home minister of India – Amit Shah, stated that crypto is responsible for the spike in drug smuggling in India.

FATF takes charge of crypto regulation
The Financial Action Task Force (FATF) is all set to strengthen its battle against money laundering and terror funding. They are preparing to conduct annual checks to ensure countries are enforcing anti-money laundering and terrorist financing rules on crypto providers operating in their jurisdiction, two sources with knowledge of the matter told Al Jazeera.

Countries not following the AML (anti-money laundering) guidelines might get added to the “gray list.” Syria, Uganda, and Barbados are part of the list. FATF increases their monitoring of the countries that are part of the gray list.

Further, FATF adds the countries that continue to be non–cooperative in dealing with AML to the Black list. Iran is a part of the Black list. They are subjected to economic sanctions and other financial restrictions by FATF.

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