The Financial Action Task Force has called on governments worldwide to step up enforcement of anti-money laundering standards in the crypto industry, warning that unchecked gaps in regulation could undermine global financial security.
In a report released Thursday from Paris, the global watchdog said jurisdictions have made progress since 2024 on implementing anti-money laundering and counter-terrorism financing frameworks for virtual assets and related service providers.
However, it noted that critical challenges remain, particularly around licensing, offshore oversight, and identifying entities involved in virtual asset services.
The FATF’s latest targeted update focused on Recommendation 15, which was expanded in 2019 to cover crypto markets.
With virtual assets inherently borderless, regulatory failures in one jurisdiction can have global consequences.
Read more in the Targeted Update on Implementation of the FATF Standards on Virtual Assets and VASPs:https://t.co/Gt5pyNU6DY#FATF #IllicitFinance #TravelRule pic.twitter.com/hgLyq6HNem
— FATF (@FATFNews) June 26, 2025
Watchdog Flags Rising Stablecoin Abuse by Illicit Networks, Urges Regulatory Action
According to the report, 99 jurisdictions have either enacted or are preparing legislation aligned with the “Travel Rule,” a key mechanism to ensure transparency in cross-border crypto transfers. The FATF also released a new guide outlining best practices for supervising compliance with the rule.
The report flags mounting threats associated with the rise of stablecoins. It said their use by illicit actors, including North Korea-linked hackers, terror financiers and drug traffickers, has grown significantly. It warned that mass stablecoin adoption without coordinated regulation could increase global exposure to illicit finance.
North Korea’s Record Crypto Theft Exposes Weak Links in Global Enforcement
The update follows a series of alarming trends. So far this year, North Korea executed what the FATF described as the largest virtual asset theft in history, stealing $1.46b from exchange platform ByBit.
Only about 3.8% of the stolen funds has been recovered. This shows serious gaps in international asset tracing and recovery efforts.
Meanwhile, fraud and scams continue to trouble the crypto sector. The FATF cited industry estimates that around $51b in on-chain transactions last year were linked to such illicit activity. These cases point to increasingly sophisticated tactics by bad actors. As a result, governments are under growing pressure to enhance cooperation and improve asset seizure mechanisms.
In one example, the UK’s Operation Destabilise demonstrated how coordinated law enforcement can disrupt crypto-fueled criminal networks. The FATF said such efforts must be replicated globally and backed by more robust supervision and enforcement.
The watchdog acknowledged support from analytics firms including Chainalysis, Lukka, Merkle Science and TRM Labs in compiling the update. It also stressed that nearly 98% of the global virtual asset market is concentrated in jurisdictions within the FATF’s Global Network. Bringing these players into full compliance, it said, will be key to reducing worldwide risk.
The post Global Watchdog Calls on Nations To Step Up Crypto Enforcement appeared first on Cryptonews.
Credit: Source link
