While the institution recognized that most jurisdictions are working to apply its recommendations, others are lagging, allowing criminal groups to use digital assets for their illicit purposes. The FATF alerted to the misuse of stablecoins and the risks of offshore VASPs.
Key Takeaways
FATF’s updated report noted 83% of surveyed jurisdictions advanced crypto regulations and the Travel Rule.The task force urged stronger oversight of offshore virtual asset providers to close illicit regulatory gaps.FATF warned criminals exploit weak links, citing a new illicit stablecoin designed to resist asset freezing.The Financial Action Task Force (FATF) has issued its 7th Targeted Update on Implementation of the FATF Standards on Virtual Assets and Virtual Asset Service Providers. This report describes the state of digital asset regulation and the remaining weak points in the oversight of criminal activity.
Recommendation 15 calls for the regulation of Virtual Asset Service Providers (VASPs) and the monitoring of existing Anti-Money Laundering / Countering the Financing of Terrorism (AML/CFT) risks.
On Thursday, the FATF called for further work on regulation, licensing, and registration of VASPs to address the remaining gaps that are leveraged by threat actors for illicit purposes.
FATF President Giles Thomson highlighted that the implementation of FATF standards can no longer be delayed, as “criminal networks continue to abuse virtual assets for illicit purposes and exploit their borderless nature to commit fraud and scams, evade sanctions and launder the proceeds of crime.”
