FATF Slaps Qatar For Lack Of Actions Toward Crypto Businesses

The Qatar Central Bank (QCB) has come under fire from the Financial Action Task Force (FATF) for not doing enough to enforce its own rules banning companies that provide services for virtual assets.

The global money-laundering and terrorism funding watchdog noted in a report released on May 31 that Qatar must improve its skills to successfully tackle changing types of illicit conduct, including punishing virtual asset service providers.

It said that there was a need to "improve understanding of more complex forms of money laundering and terrorist financing."

Virtual asset services are not permitted in or out of the Qatar Financial Centre, according to a December 2019 announcement by the Qatar Financial Centre Regulatory Authority (QFCRA).

The regulatory body issued a warning at the time, stating that any company that provides, enables the provision of, or exchanges crypto assets will be subject to fines in accordance with the QFCRA's rights and obligations.

While Qatar has made "positive and sustained progress" in obtaining beneficial ownership data for its nearly finished unified register—a consolidation of data on its citizens—there is still work to be done, according to a recent FATF report:

“There are still not sufficient controls to ensure that all information collected remains accurate and up-to-date.” the regulatory body added.

It was claimed that Qatar's "sophisticated analysis capabilities" to detect cases of money laundering are not being fully employed, and the country's authorities were asked to strengthen their investigations into money laundering.

Although Qatar has outlawed providers of virtual asset services, it has also acknowledged that it is actively investigating use cases for introducing a central bank digital currency (CBDC).

The QCB is reportedly at the "foundation stage" of issuing a CBDC, as was originally reported in June 2022. Sheikh Bandar bin Mohammed bin Saoud Al Thani, governor of Qatar's central bank, disclosed at the time that the QCB was "evaluating the pros and cons" of CBDCs and figuring out the best technology and platform.