Navigating the virtual landscape: fatfs regulatory guidance and the travel rule for virtual assets

The article explores crucial aspects of the legal framework for virtual assets through the guidance of the Financial Action Task Force (FATF) in developing financial measures to combat money laundering. The research aims to highlight important aspects of FATF's legal framework concerning virtual assets, particularly in revealing the travel rule for the transfer of virtual assets, aiming for a deeper understanding and formulation of proposals for effective regulation of virtual assets in Ukraine and European Union member states. In this study, a comprehensive methodological foundation is employed, encompassing general scientific and specific legal methods of scientific cognition. The system of methods includes general scientific principles such as deduction and induction, synthesis and analysis, analogy, as well as a systematic approach. Special legal methods encompass formal legal, legal forecasting, comparison, and systemic-structural methods. Recommendations for virtual asset service providers (VASPs) are examined, emphasizing compliance with regulatory acts on combating money laundering and countering terrorist financing. The extension of the travel rule for the transfer of virtual assets is discussed, underscoring the importance of information exchange between senders and recipients to enhance transaction transparency. The significance of applying a risk-oriented approach to anti-money laundering and counter-terrorism financing measures for virtual assets, including risk assessment and mitigation, is noted. Additionally, the article discusses the encouragement for countries to establish licensing or registration regimes for VASPs, ensuring regulatory oversight. Emphasis is placed on the necessity of national and international cooperation for effective regulation of virtual assets, promoting information exchange and collaborative efforts. The leadership also supports a technologically neutral approach, recognizing that measures against money laundering and terrorist financing should be universal, irrespective of the technology used, including blockchain.

virtual assets, Financial Action Task Force, Virtual Asset Service Providers, anti-money laundering, anti-terrorist financing, risk-based approach, travel rule