FATF Recommendations
Web3 / compliance
The FATF Recommendations are a set of 40 international standards that form the global framework for combating money laundering, terrorist financing, and proliferation financing. Established by the Financial Action Task Force, an intergovernmental organization of nearly 200 countries, these recommendations provide guidance on customer due diligence, transaction monitoring, sanctions compliance, beneficial ownership disclosure, and reporting obligations. The FATF periodically updates its recommendations to address emerging risks, including crypto-specific guidance issued in 2019 and refined in subsequent years to address decentralized finance and self-hosted wallets. Example: The FATF's 2019 recommendations on virtual assets introduced the Travel Rule and VASP definition, which countries like France, Switzerland, and Singapore incorporated into national legislation and regulatory frameworks. Why it matters for compliance: The FATF Recommendations set the international baseline for AML/CFT regulation, influencing how countries develop domestic laws and how financial institutions structure compliance programs. Adherence demonstrates institutional commitment to global standards and reduces regulatory risk across jurisdictions.
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