🌍 (16 July) Financial Action Task Force (FATF) calls for closing of regulatory gaps as virtual asset illicit finance risks become more complex

✳️ 83% of jurisdictions have now implemented Travel Rule legislation—up from 73% in 2025—with 11 more reporting implementation is underway.
✳️ Overall progress on AML/CFT regulation and supervisory actions reported, but many jurisdictions struggle to translate legal frameworks into effective supervision and enforcement in practice.
✳️ Jurisdictions continue to face difficulties identifying individuals and entities conducting VASP activities, and those with prohibition frameworks struggle with identification and sanctioning of illicit activity.
✳️ Organized crime groups are exploiting regulatory gaps to move billions in illicit proceeds through virtual assets, with activity becoming more complex and interconnected.
✳️ Criminal schemes include organized crime-linked scam centres, “pig-butchering” scams, DPRK-related cyber theft, terrorist financing, and sanctions evasion.
✳️ Growing misuse of AI in virtual asset-related crime, including deepfakes, synthetic identities, and AI-enabled recruitment scams.
✳️ Stablecoin misuse by illicit actors has significantly increased; most identified on-chain illicit activity now involves stablecoins, with emerging risks of proprietary stablecoins designed to resist freezing and asset seizure.
✳️ Key cases: Cambodia-based conglomerate laundered $4B+ between 2021–2025, serving both organized crime and DPRK cyber theft; Spanish network laundered €460M from 5,000+ victims.
✳️ Jurisdictions with materially important VASP activity represent approximately 97% of the global virtual asset market.
✳️ Priority actions include strengthening risk-based supervision, improving Travel Rule implementation, enhancing international cooperation, and addressing risks from stablecoins, offshore VASPs, unhosted wallets, and DeFi platforms.
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