FATF Criticizes QCB for Failed Regulation Against Crypto

The Financial Action Task Force (FATF) has criticized the Qatar Central Bank (QCB) for failing to implement its regulations prohibiting virtual asset service providers.

In a report published on May 31, the global money-laundering and terrorism financing watchdog highlighted Qatar’s need to enhance its capacity to combat evolving forms of criminality, including the sanctioning of virtual asset service providers.

“It needs to improve its understanding of more complex forms of money laundering and terrorist financing,” the report states.

The Qatar Financial Centre Regulatory Authority (QFCRA) announced in December 2019 that virtual asset services cannot be provided in or from the Qatar Financial Centre.

The regulatory authority warned that any company providing or facilitating the provision or exchange of crypto assets would be subject to penalties under the QFCRA’s rights and obligations.

Qatar has made “positive and sustained progress” in gathering beneficial ownership information for its nearly complete unified register — a consolidation of data on its citizens—according to a recent report by the Financial Action Task Force (FATF), but more work remains:

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

It is alleged that Qatar’s “sophisticated analysis capabilities” for identifying instances of money laundering are not being utilized to their full potential.

While Qatar has prohibited virtual asset service providers, it has disclosed that it is actively exploring potential use cases for a central bank digital currency (CBDC).

In June 2022, it was reported that the QCB was in the “foundational stage” of issuing a CBDC.

Sheikh Bandar bin Mohammed bin Saoud Al Thani, the governor of Qatar’s central bank, disclosed that the QCB was “weighing the pros and cons” of CBDCs and determining the optimal technology and platform.