Customer Due Diligence

Definition ∞ Customer Due Diligence (CDD) refers to the procedures financial institutions and cryptocurrency platforms undertake to verify the identity of their clients and assess potential risks. These measures are critical for preventing financial crimes, including money laundering and terrorist financing, by gathering and analyzing relevant customer information. CDD ensures compliance with anti-money laundering (AML) regulations globally.
Context ∞ The implementation and enhancement of Customer Due Diligence processes are regularly discussed in the context of global financial regulations and the cryptocurrency industry’s efforts to achieve mainstream acceptance. News often covers regulatory updates and technological advancements aimed at improving the efficiency and effectiveness of CDD within digital asset services. This remains a crucial aspect of regulatory compliance.

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→Sanctions Screening

→Global Regulatory Gaps

→VASP Definition Clarity

FATF Finalizes Global Guidance Expanding AML/CFT Scope for Digital Assets

Global AML standards now compel VASP operators to integrate Travel Rule compliance and systemic due diligence controls.

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→Travel Rule Compliance

→Regulatory Interoperability

→Cross-Border Transfers

FATF Mandates Global Travel Rule Implementation; Cites Low Compliance

Global VASPs must urgently operationalize the Travel Rule, as the FATF cites a 75% jurisdictional compliance shortfall, demanding rapid domestic legislative action.

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→Transaction Data

→Financial Crime Prevention

→Automatic Information Exchange

European Union Mandates Standardized Crypto Transaction Reporting for Tax Authorities

DAC8's Implementing Regulation compels CASPs to architect a unified, cross-border data reporting module, transforming tax compliance into a systemic EU mandate.