FATF Reports Ongoing Gaps in Virtual Asset Regulation as Criminals Exploit Loopholes

The Financial Action Task Force said in a latest report that, although more countries have passed laws regulating virtual assets, many are still in the implementation stage and organized crime groups are using these gaps to move billions of dollars in illicit proceeds through the sector. According to Foresight News, the report said 83% of surveyed jurisdictions have implemented the travel rule through legislation, up from 73% in 2025, while 11 jurisdictions are still advancing implementation work.

The report said jurisdictions still face difficulties identifying entities engaged in virtual asset service provider activity and addressing risks linked to offshore VASPs and decentralized finance platforms. It also said the misuse of stablecoins by North Korea-related actors and terrorist financiers continues to increase, and that criminal networks have begun developing proprietary stablecoins to resist asset freezes and seizures. The report cited cases including a Cambodian financial services group that laundered at least $4 billion between 2021 and 2025, and a crypto investment scam network involving about 460 million euros that was dismantled by the Spanish Civil Guard in June 2025.

FATF Chair Giles Thomson said governments and the private sector must strengthen cooperation to close regulatory gaps and improve cross-border coordination.