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FATF Report – Targeted Update on Implementation of the FATF Standards on Virtual Assets and Virtual Assets Service Providers

In July 2024, the Financial Action Task Force (FATF) published the report on ‘Targeted Update on Implementation of the FATF Standards on Virtual Assets and Virtual Assets Service Providers’. The report provides the fifth update on jurisdictions’ compliance with FATF’s Recommendation 15 and its Interpretative Note (R.15/INR.15). The report findings demonstrate that though some jurisdictions have made significant progress to implement AML/CFT regulation in place pertaining to Virtual Assets and Virtual Assets Service Providers, global implementation is still lagging. Many countries need to rapidly undertake significant measures to regulate the sector and it is crucial for these jurisdictions to implement the standards in full. Based on 130 FATF mutual evaluation and follow-up reports since the revised R.15/INR.15 adopted in 2019, only 75% of jurisdictions are partially or not compliant with the FATF’s requirements, resulting in same findings to that of April 2023. Also, jurisdictions have made insufficient progress in implementing the Travel Rule, which is a key AML/CFT measure. The report also provides updates on emerging risks and market developments relating to the use of VAs for money laundering, terrorist financing and proliferation financing.

The FATF calls on all jurisdictions to rapidly implement the FATF’s Standards on VAs and VASPs, including the FATF’s Travel Rule. In line with the roadmap to improve implementation of R.15 and to address the findings of this report, the FATF will continue to:

  • Facilitate outreach and provide assistance to lower-capacity jurisdictions including those materially important VASP activities;
  • Facilitate sharing of best practices, finding, and challenges, including relating to DeFi, stablecoins, unhosted wallets, and P2P and monitor market trends in this area for material developments that may necessitate further FATF work; and
  • Engage with FATF member countries, the global network, technical assistance providers and the private sector on progress and challenges.

 The report is accessible here.

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