FATF Reports Significant Increase in Ransomware Attacks and Cryptocurrency-related Crimes
On February 24th, the Financial Action Task Force (FATF) reported on the outcomes of their recent meeting held from February 22nd to February 24th. The FATF agreed on an action plan to implement their global standards for cryptocurrency in response to the growing ransomware attacks around the world.
The FATF is a multinational organization that was established in 1989 to develop international standards for anti-money laundering and counter-terrorism financing. It has 37 member countries and regions, including the G7, as well as two regional organizations, and its recommendations apply to over 200 countries and regions worldwide.
During the meeting, the FATF emphasized the increasing scale and number of ransomware attacks targeting individuals, companies, and government agencies worldwide. These attacks often result in large ransoms paid in cryptocurrency, which the criminals can then easily convert to cash.
The FATF expressed concerns that criminals can easily access cryptocurrency service providers around the world, particularly in countries or regions where anti-money laundering and counter-terrorism financing measures are insufficient or not implemented. To address this issue, the FATF highlighted the need for international cooperation mechanisms and the development of skills and tools to track and recover virtual assets quickly before they are dissipated.
The FATF also stressed the importance of collaborating with organizations specializing in cybersecurity and data protection to achieve these goals.
Ransomware attacks have significantly increased since 2020, with the Colonial Pipeline attack in May 2021 being a high-profile example of a victim paying approximately 540 million yen in cryptocurrency.
In March, the FATF plans to issue a report on ransomware response measures. The FATF also agreed on a roadmap to strengthen the enforcement of travel rules and other measures related to cryptocurrency. This is in response to the fact that many countries still lack regulations on cryptocurrencies, which can be exploited by criminals and terrorists.
The roadmap includes a global investigation into the level of implementation of FATF recommendations related to cryptocurrencies. The FATF plans to report on the measures taken by its member countries and FATF-style regional bodies to regulate and supervise cryptocurrency service providers in the first half of 2024.
The travel rule requires financial institutions to share customer information when transferring funds between institutions to prevent money laundering and terrorist financing.
InDuring the meeting, the FATF made the decision to suspend the membership of the Russian Federation, one year after its illegal and unprovoked military invasion of Ukraine. The reasoning behind this move was Russia’s continued aggression against Ukraine, which contradicts the FATF’s principles of promoting security, safety, and integrity of the global financial system. The FATF also placed South Africa and Nigeria under increased monitoring, indicating that these countries have committed to resolving the identified strategic deficiencies within agreed timeframes. Additionally, the FATF acknowledged Cambodia and Morocco’s progress in improving their respective AML/CFT regimes and announced that both countries are no longer subject to increased monitoring but will continue to collaborate with the FATF-style regional body (FSRB) of which they are a member to further strengthen their AML/CFT regimes.
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