FATF sounds alarm on crypto regulation gaps

The Financial Action Task Force (FATF) has warned of the risks of virtual assets being used for money laundering, terror financing and other illicit activities, and stressed the need for urgent global action.

The Paris-based global financial watchdog called on countries to take stronger action to combat illicit finance in crypto assets, warning that gaps in regulation could have global repercussions.

It said that progress has been made since 2024 in regulating virtual assets, many jurisdictions still have work to do.

As of April 2025, only 40 of 138 jurisdictions assessed were "largely compliant" with FATF's crypto standards, up from 32 a year earlier, FATF said in a statement. "With virtual assets inherently borderless, regulatory failures in one jurisdiction can have global consequences," it added.

FATF also raised concerns about the use of stablecoins, a type of cryptocurrency pegged to fiat currencies, by "various illicit actors", including North Korea, terrorist financiers and drug traffickers. It said most illicit crypto activity now involves stablecoins.