Financial crime task force eyeing binding crypto exchange rules: Japan official

FILE PHOTO: Cables running into cryptocurrency miners are seen at the HydroMiner cryptocurrency farming operation near Waidhofen an der Ybbs, Austria April 25, 2018. REUTERS/Leonhard Foeger/File Photo

TOKYO (Reuters) - International financial crime-fighting group Financial Action Task Force (FATF) will start discussions later this month on introducing binding rules governing cryptocurrency exchanges, a Japanese government official familiar with the matter said on Tuesday.

The move, spurred by a call in March from financial policymakers from the world’s top 20 economies for regulators to monitor cryptocurrencies, would be a step up from the non-binding guidelines currently in place.

Those guidelines, dating from June 2015, look for exchanges to be registered or licensed, for exchanges to verify customers’ identities to prevent money laundering and for suspicious trading to be reported.

The FATF discussions beginning June 24 will look at whether those rules are still appropriate, how they can be applied to new exchanges and how to work with countries that have moved to ban cryptocurrency trading, said the official who spoke on condition on anonymity.

Paris-based FATF, a 37-nation group set up by the G7 industrial powers, did not respond immediately to a request for comment.

Japan was the first country to adopt a registration system for cryptocurrency exchanges but with current guidelines non-binding, enforcement among countries is inconsistent.

Due to chair the G20 in 2020, the Japanese government hopes to take a lead on the issue and is pushing for adoption of new binding rules by 2019 at the latest, the official said.

Japan believes it can gain the cooperation of governments in Europe and the United States, the official added.

Japan’s Financial Services Agency (FSA) was not immediately available to comment.

Reporting by Takahiko Wada; Writing by Sam Nussey; Editing by Muralikumar Anantharaman