World Oversight Authority Urges Countries to Intensify Crypto Regulation Efforts

The Financial Action Task Force (FATF) is urging governments everywhere to enhance the enforcement of anti-money laundering measures in the cryptocurrency sector, warning that unchecked regulatory gaps could jeopardize global financial stability.

In a report issued on Thursday from Paris, the international oversight organization indicated that jurisdictions have made strides since 2024 in establishing anti-money laundering and counter-terrorism financing regulations for virtual assets and their service providers.

Nonetheless, it pointed out that significant challenges persist, particularly regarding licensing, offshore monitoring, and the identification of entities involved in virtual asset services.

The FATF’s recent specific update concentrated on Recommendation 15, which was broadened in 2019 to include crypto markets.

Watchdog Highlights Increasing Stablecoin Misuse by Illegal Networks, Calls for Regulatory Measures

The report states that 99 jurisdictions have either implemented or are in the process of drafting laws that align with the “Travel Rule,” a crucial framework to promote transparency in international crypto transactions. The FATF also released new guidelines outlining best practices for overseeing compliance with this rule.

It flags increasing risks linked to the growing use of stablecoins. Their adoption by criminal entities, including hackers associated with North Korea, terror financiers, and drug traffickers, has surged. The report cautioned that widespread stablecoin acceptance without proper regulation could heighten the global threat of illicit finance.

North Korea’s Major Crypto Theft Uncovers Weaknesses in Global Regulation

This update follows a series of concerning developments. This year, North Korea has reportedly carried out what the FATF termed the largest virtual asset heist ever, stealing $1.46 billion from the exchange platform ByBit.

Only approximately 3.8% of the stolen assets have been retrieved, highlighting significant shortcomings in international asset tracking and recovery efforts.

In addition, fraud and scams continue to plague the crypto industry. The FATF mentioned estimates suggesting that about $51 billion in blockchain transactions last year were tied to illicit activities. These occurrences reveal increasingly sophisticated methods employed by malicious actors. Consequently, governments face mounting pressure to enhance collaboration and refine asset seizure processes.

An example is the UK’s Operation Destabilise, which showcased how coordinated law enforcement can disrupt cryptocurrency-driven criminal organizations. The FATF emphasized that such strategies need to be implemented globally, with stronger oversight and enforcement measures.

The organization acknowledged the help of analytics companies like Chainalysis, Lukka, Merkle Science, and TRM Labs in preparing this update. It also underscored that nearly 98% of the global virtual asset market operates within jurisdictions that are part of the FATF’s Global Network. Ensuring compliance from these participants, it stated, will be essential in minimizing worldwide risks.

This article, “Global Watchdog Urges Nations to Enhance Crypto Enforcement,” originally appeared on Cryptonews.