Also, the FATF seems utterly incompetent at writing well-designed regulation.
It is for example very hard to make sense of their definitions. Here is their definition of "virtual asset": "A virtual asset is a digital representation of value that can be digitally traded, or transferred, and can be used for payment or investment purposes. Virtual assets do not include digital representations of fiat currencies, securities and other financial assets that are already covered elsewhere in the FATF Recommendations." [1]
Some nitpicking: Taken literally, Bitcoin falls through this definition, because a Bitcoin is not a "digital representation of value", it is a "digital value". It does not represent anything, it is the value itself. But that's the least problem of all. The FATF commits the sin of providing a negative definition, basically saying every digital representation of value is a virtual asset except for those already covered elsewhere. No biologist would ever define "tree" as every plant not already described elsewhere. It is not something you can meaningfully work with. But let's see what they already covered elsewhere. For example, they cover "funds" elsewhere. Funds is defined as "every kind of asset". But if "virtual assets" are "assets" and therefore also "funds", they are already covered elsewhere and thus no "virtual asset" anymore. One should also note that FATF frequently uses the term "funds or other assets", indicating that they don't really know the meaning of the word "every".
Edit, just to add another point: you would think that the 134-page strong document "INTERNATIONAL STANDARDS
ON COMBATING MONEY LAUNDERING AND THE FINANCING OF TERRORISM & PROLIFERATION" in which the expression "money laundering" is used 284 times would somehow provide a clear definition of what money laundering is? You would be wrong. "Money laundering offense" is tautologically defined as "References (except in Recommendation 3) to a money laundering offence refer not only to the primary offence or offences, but also to ancillary offences." That's all. No further specification about what money laundering actually is.
It is for example very hard to make sense of their definitions. Here is their definition of "virtual asset": "A virtual asset is a digital representation of value that can be digitally traded, or transferred, and can be used for payment or investment purposes. Virtual assets do not include digital representations of fiat currencies, securities and other financial assets that are already covered elsewhere in the FATF Recommendations." [1]
Some nitpicking: Taken literally, Bitcoin falls through this definition, because a Bitcoin is not a "digital representation of value", it is a "digital value". It does not represent anything, it is the value itself. But that's the least problem of all. The FATF commits the sin of providing a negative definition, basically saying every digital representation of value is a virtual asset except for those already covered elsewhere. No biologist would ever define "tree" as every plant not already described elsewhere. It is not something you can meaningfully work with. But let's see what they already covered elsewhere. For example, they cover "funds" elsewhere. Funds is defined as "every kind of asset". But if "virtual assets" are "assets" and therefore also "funds", they are already covered elsewhere and thus no "virtual asset" anymore. One should also note that FATF frequently uses the term "funds or other assets", indicating that they don't really know the meaning of the word "every".
Edit, just to add another point: you would think that the 134-page strong document "INTERNATIONAL STANDARDS ON COMBATING MONEY LAUNDERING AND THE FINANCING OF TERRORISM & PROLIFERATION" in which the expression "money laundering" is used 284 times would somehow provide a clear definition of what money laundering is? You would be wrong. "Money laundering offense" is tautologically defined as "References (except in Recommendation 3) to a money laundering offence refer not only to the primary offence or offences, but also to ancillary offences." That's all. No further specification about what money laundering actually is.
[1]: https://www.fatf-gafi.org/media/fatf/documents/recommendatio...