Definition ∞ FATF compliance refers to adhering to the anti-money laundering and counter-terrorist financing recommendations set forth by the Financial Action Task Force. For digital asset businesses, this involves implementing robust Know Your Customer procedures, transaction monitoring, and suspicious activity reporting. These measures aim to prevent the illicit use of cryptocurrencies and digital assets within the global financial system. Compliance is essential for legitimacy and access to traditional financial services.
Context ∞ FATF compliance remains a significant regulatory hurdle and discussion point for cryptocurrency exchanges and digital asset service providers worldwide. Debates often concern the practical implementation of the “Travel Rule,” which requires virtual asset service providers to share customer information during transactions. Future regulatory landscapes will likely see increased enforcement and international cooperation to standardize these anti-money laundering requirements.
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