At the heart of the FATF Interpretive Note is a recommendation to treat VASPs in the same manner as traditional financial institutions in terms of complying with policies and procedures, risk assessments, Know Your Customer (KYC)/ Anti-Money Laundering (AML)/ Counter-Terrorism Financing (CTF) onboarding standards, transaction monitoring and SAR filings.
The first step is for VASPs to complete a risk assessment of their client base. Once the risk assessment is complete, VASPs should implement appropriate onboarding policies and procedures that include KYC, AML and CTF
screening and monitoring.
Next, VASPs must complete screening checks on their clients’ physical identity, focusing on sanctions, enforcements, adverse media, state-owned entity and Politically Exposed Persons (PEP)
When VASPs detect suspicious behavior by any of their clients, they must file Suspicious Activity Reports (SARs), just as standard financial institutions do.
Increased regulation means that VASPs that want to operate safely will need to invest in the right tools to protect their business and customers. Working with a data and analytics partner can help them to tackle security issues in the fast-evolving virtual assets market, reduce their risk and gain legitimacy in global financial markets.
Learn more about the implications of FATF’s Interpretive Note on Recommendation 15 in our e-book, “What Virtual Asset Service Providers Need to Know About Mitigating Risks from Virtual Assets.”