FATF urges stronger global action to address Illicit Finance Risks in Virtual Assets

Paris, 26 June 2025 - In its sixth targeted update on the global implementation of anti-money laundering and counter-terrorist financing (AML/CFT) measures to virtual assets (VA) and virtual asset service providers (VASPs), published today, the Financial Action Task Force (FATF) highlights where stronger action is needed to safeguard the integrity of the international financial system.

The report assesses jurisdictions’ compliance with the FATF’s Recommendation 15 and its Interpretative Note (R.15/INR.15), which was updated in 2019 to apply AML/CFT measures to VAs and VASPs. It finds that overall, jurisdictions—including those with materially important VASP activity—have made progress since 2024 towards developing or implementing AML/CFT regulation and taking supervisory and enforcement actions.

However, the FATF highlights the need for further work on licensing and registration, and that jurisdictions continue to face difficulties in identifying natural or legal persons that conduct VASP activities. Jurisdictions have also reported challenges with mitigating the risk of offshore VASPs.

99 jurisdictions have passed or are in the process of passing legislation implementing the Travel Rule, which ensures transparency of information 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.

The report also includes an updated table of the steps taken by jurisdictions in the FATF’s Global Network with materially important VASP activity to regulate VA/VASPS. With these jurisdictions constituting approximately 98 percent of the global VA market, ensuring the FATF Standards are fully implemented by jurisdictions within this group will significantly help to reduce global risks overall. The FATF acknowledges the role of Chainalysis, Lukka Inc, Merkle Science, and TRM Labs who contributed to this exercise.

With virtual assets inherently borderless, regulatory failures in one jurisdiction can have global consequences. The report highlights emerging risks arising from the criminal exploitation of virtual assets including:

• The use of stablecoins by various illicit actors, including Democratic People’s Republic of Korea (DPRK) actors, terrorist financiers, and drug traffickers, has continued to increase since the 2024 Targeted Update, and most on-chain illicit activity now involves stablecoins (p. 20). Mass adoption of stablecoins or VAs more broadly could amplify illicit finance risks, particularly with uneven implementation of the FATF Standards for VAs/VASPs.
• The DPRK this year carried out the largest single VA theft in history, stealing $1.46 billion from the VASP ByBit. Only 3.8% of the stolen funds have been recovered, highlighting the need to address asset recovery challenges and improve international co-operation (p.19).
• The FATF also noted the significant uptick in the use of VAs in fraud and scams, with one industry participant estimating that there was approximately $51 billion in illicit on-chain activity relating to fraud and scams in 2024 (p. 20).

Findings from significant cases over the past year, such as the UK’s Operation Destabilise (p. 19), underscore the importance of international co-operation and the ability to freeze and seize assets to disrupt criminal networks and their activities. Key areas for improvement are laid out for both the private and public sector to better address persistent and significant threats, such as taking effective countermeasures to address the increased professionalisation of scammers.