International Regulator Urges Countries to Enhance Cryptocurrency Regulation Enforcement

The Financial Action Task Force has urged governments around the globe to enhance the enforcement of anti-money laundering regulations within the cryptocurrency sector, cautioning that unregulated areas could jeopardize international financial stability.

In a report published on Thursday from Paris, the international regulatory body indicated that jurisdictions have made strides since 2024 in establishing anti-money laundering and counter-terrorism financing frameworks for virtual assets and associated service providers.

Nevertheless, it highlighted that significant challenges persist, especially concerning licensing, oversight of offshore operations, and the identification of entities engaged in virtual asset services.

The FATF’s most recent targeted update concentrated on Recommendation 15, which was broadened in 2019 to encompass cryptocurrency markets.

Given that virtual assets are inherently borderless, regulatory shortcomings in one jurisdiction can lead to global repercussions.
Read more in the Targeted Update on Implementation of the FATF Standards on Virtual Assets and VASPs: https://t.co/Gt5pyNU6DY #FATF #IllicitFinance #TravelRule pic.twitter.com/hgLyq6HNem

— FATF (@FATFNews) June 26, 2025

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

The report indicates that 99 jurisdictions have either implemented or are in the process of enacting legislation that aligns with the “Travel Rule,” a crucial mechanism aimed at ensuring transparency in cross-border cryptocurrency transactions. The FATF also published a new guide detailing best practices for overseeing compliance with this rule.

The report points out escalating risks associated with the proliferation of stablecoins. It noted that their utilization by illicit actors, including hackers linked to North Korea, financiers of terrorism, and drug traffickers, has risen markedly. It cautioned that widespread adoption of stablecoins without coordinated regulatory measures could heighten global vulnerability to illicit financial activities.

North Korea’s Historic Crypto Theft Reveals Weaknesses in Global Enforcement

This update follows a series of concerning trends. Thus far this year, North Korea has carried out what the FATF characterized as the largest virtual asset theft ever, taking $1.46 billion from the exchange platform ByBit.

Only approximately 3.8% of the stolen assets have been retrieved, highlighting significant deficiencies in international asset tracing and recovery initiatives.

At the same time, fraud and scams continue to plague the cryptocurrency industry. The FATF referenced industry estimates suggesting that around $51 billion in on-chain transactions last year were associated with such illicit activities. These incidents indicate increasingly sophisticated methods employed by malicious actors. Consequently, governments are facing mounting pressure to bolster cooperation and enhance asset seizure processes.

In one instance, the UK’s Operation Destabilise showcased how coordinated law enforcement can disrupt criminal networks fueled by cryptocurrency. The FATF stated that such initiatives should be replicated globally and supported by more stringent supervision and enforcement.

The regulatory body acknowledged the assistance of analytics firms, including Chainalysis, Lukka, Merkle Science, and TRM Labs, in preparing the update. It also emphasized that nearly 98% of the global virtual asset market is concentrated in jurisdictions within the FATF’s Global Network. Ensuring that these entities achieve full compliance, it noted, will be essential for mitigating worldwide risk.

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