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.
However, it noted that critical challenges remain, particularly around licensing, offshore oversight, and identifying entities involved in virtual asset services.
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.
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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.
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.