Global Watchdog Calls on Nations To Step Up Crypto Enforcement

The Financial Action Task Force (FATF) has issued a stark warning to governments worldwide, urging enhanced enforcement of anti-money laundering (AML) standards in the cryptocurrency sector. Regulatory gaps, if left unchecked, could jeopardize global financial stability, the Paris-based watchdog emphasized in its latest report.

While jurisdictions have made progress since 2024 in implementing AML and counter-terrorism financing frameworks for VIRTUAL assets, critical challenges persist. Licensing ambiguities, offshore oversight deficiencies, and identification of virtual asset service providers remain key vulnerabilities. The FATF's update specifically addresses Recommendation 15, expanded in 2019 to encompass crypto markets, highlighting the borderless nature of digital assets where one jurisdiction's failures can create global ripple effects.

Notably, 99 jurisdictions have either adopted or are drafting legislation aligned with the 'Travel Rule,' a cornerstone mechanism for transparent cross-border crypto transactions. The report also spotlights increasing misuse of stablecoins by illicit networks, prompting calls for immediate regulatory action.