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The Financial Action Task Force (FATF) mentioned in a report launched this week that global efforts to regulate digital belongings and service suppliers have improved but stay incomplete, with illicit use of stablecoins accelerating sharply in 2025.
The intergovernmental watchdog’s sixth focused replace on the implementation of its requirements discovered that although 73% of jurisdictions surveyed have handed legal guidelines implementing the so-called Travel Rule for crypto transfers, enforcement stays restricted.
The report famous that out of the 85 international locations with Travel Rule legal guidelines, practically 60% have yet to concern compliance findings or directives.
The report also highlighted a record-breaking $1.46 billion digital asset theft this 12 months by North Korean actors from the crypto alternate Bybit.
FATF famous the hackers used social engineering and complicated laundering networks involving mixers, OTC merchants, and more than 125,000 Ethereum wallets. Only 3.8% of stolen funds had been recovered, highlighting persistent difficulties in tracing and repatriating crypto-linked proceeds of crime.
Overall, stablecoins have become the dominant car for illicit on-chain exercise, pushed by their low value, quick settlement, and broad liquidity.
FATF cited personal sector estimates displaying over $30 trillion in stablecoin quantity during the previous 12 months, alongside the development of ‘pig butchering’ scams and skilled rip-off networks using AI-generated chatbots and deepfakes to defraud victims.
Despite these dangers, the report discovered that only one jurisdiction is totally compliant with FATF Recommendation 15 on digital asset oversight. Meanwhile, 29% of international locations had been rated ‘largely compliant,’ while about half stay only partially compliant and 21% are not compliant at all.
FATF urged jurisdictions to speed up licensing and registration of digital asset service suppliers, strengthen enforcement against unregistered entities, and implement measures to monitor decentralized finance (DeFi) preparations.
The report also famous that around half of the surveyed regulators require DeFi initiatives with identifiable management events to register as VASPs, but enforcement stays uncommon.
Looking forward, FATF plans focused reviews on stablecoins, offshore VASPs, and DeFi over the next 12 months. The regulatory physique warned that as stablecoins method mass adoption, uneven global regulation will heighten illicit finance dangers and hamper coordinated responses.
The next complete replace on Recommendation 15 implementation is due in 2026.
The publish FATF sounds alarm over rising stablecoin misuse as global crypto rules lag appeared first on CryptoSlate.
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