On June 26, the Financial Action Task Force (FATF) released updated guidelines that call for stronger global action to address illegal finance risks in virtual assets. The Paris-based watchdog called on countries to ensure the global implementation of anti-money laundering (AML) and counter terrorist financing (CFT) in virtual assets.
FATF Report for Stricter Crypto Regulation
FATF stated that while some progress has been made since 2024 in regulating virtual assets, many jurisdictions still have to combat risks as crypto scams surge. As part of its sixth targeted update, the agency highlights the need for licensing and registration since many jurisdictions have reported challenges in mitigating the risks of offshore virtual asset service providers (VASPs).
As 99 jurisdictions have either passed or are in the process of implementing travel rules, FATF released a report on Travel Rule Supervision to ensure transparency around cross-border payments.
“To assist global implementation of the Travel Rule, the FATF has also published Best Practices on Travel Rule Supervision today. This report provides examples of good practices that jurisdictions may consider when developing their supervisory frameworks,” FATF said.
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What triggered it?
As of 2025, only 40 out of 138 jurisdictions assessed were largely compliant with FATF crypto standards, as countries continue to find difficulty in identifying the entity behind crypto transactions. FATF states,
“With virtual assets inherently borderless, regulatory failures in one jurisdiction can have global consequences.”
This FATF report is a response to the rising concerns about illicit risk in the financial domain related to crypto. As the crypto hacks have surged in 2025, reaching over $2.47 billion, FATF appears to be laying the groundwork for safety and transparency measures in crypto transactions.
Crypto Thefts in 2025
As the crypto thefts have skyrocketed from 2024—
- A North Korean criminal gang stole $1.46 billion from VASP Bybit (in 2025), without much recovery.
- Another $51 billion was stolen in illicit on-chain activity in 2024
These thefts prompted the regulator to urge stricter regulations and action for crypto transactions and norms for VASPs.
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FAQs
FATF (Financial Action Task Force) is an intergovernmental body that sets global standards to combat money laundering and terrorist financing.
Rising crypto hacks and weak compliance pushed FATF to urge stronger global AML/CFT action for digital assets.
Only 40 out of 138 countries assessed are mostly compliant with FATF’s virtual asset rules in 2025.
