Global anti-money laundering (AML) authorities are calling for greater oversight of the money laundering risks in the digital asset markets.

The Financial Action Task Force (FATF) has issued new guidance that calls on regulators, so-called “virtual asset service providers” and other firms involved in the digital asset markets to identify and address money laundering and terrorist financing risks.

The FATF said the new guidance aims to help regulators develop policy responses, and to help firms in the digital asset market understand their AML obligations and how they can comply with them.

“The FATF adopted updated guidance that clarifies the application of the risk-based approach to implementing the FATF recommendations in the context of virtual assets,” it said, noting that the guidance was developed with input from firms in the digital asset industry.

The new guidance follows the FATF’s recent efforts to ensure that financial activities involving virtual assets be subject to oversight to address the money laundering risks by applying FATF requirements to firms in the digital asset space, including licensing or registration requirements; preventive measures, such as customer due diligence, record keeping and suspicious transaction reporting; and sanctions and other enforcement measures.

The FATF also outlined its plans for a strategic review to analyze the progress on implementing effective AML measures.

“As the FATF continues to lead global action against money laundering, the financing of terrorism and proliferation, it must ensure that its work is timely, targeted and effective,” it said. “This review will analyse the progress made on effective implementation of AML/CFT measures, review the FATF assessment processes, and identify drivers of positive change.”