The UAE Central Bank has released new guidance on anti-money laundering (AML) and counter-terrorism financing (CTF) for financial institutions handling virtual assets after FATF adds it in grey list.

This includes virtual assets, such as, cryptocurrencies and non-fungible tokens (NFTs), aiming to address the associated risks. The guidance considers the Financial Action Task Force (FATF) standards.

Key Points from the Guidance

Notably, the issued guidance outlines the risks involved in dealing with virtual assets and virtual asset service that includes licensed virtual assets service providers.

Moreover, the risks are applicable while engaging with customers and counterparties dealing in virtual finance.

Financial organizations, such as, banks, finance companies, exchange houses, payment service providers, registered hawala providers, insurance companies, and even agents, and brokers make the list.

Effective Date and Alignment with FATF

It should be noted that, the guidance shall come into effect from the date of its announcement.

FATF is an international body that establishes AML and CTF regulations.

 Importantly, the inclusion of the UAE in the FATF’s “grey” list in March 2022 indicating further increased monitoring on UAE has prompted it to control virtual assets.

Financial anomalies loom in UAE after the country is added to grey list

The move by UAE’s central Bank which dictates the guidelines obviously is a correct move

It should be noted that, the UAE Central Bank’s issuance of AML/CTF guidance that deals with virtual assets reflects the growing importance of regulating cryptocurrencies along with NFTs within the financial sector. 

Importantly, UAE is trying to enhance its AML and CTF framework to enable itself to comply with guidelines.

If the State authorities regulate the volatility of cryptocurrencies.

It can fetch huge fruitfulness that can further make it a game-changer in financial-world.

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