FATF targets crypto hubs in review of money laundering controls

FATF launches targeted review of crypto jurisdictions

The Financial Action Task Force (FATF) is launching a targeted review of jurisdictions with significant cryptocurrency activity. The intergovernmental watchdog said the review will examine gaps in how governments apply global anti-money laundering standards to crypto businesses.

The FATF announced the review on Friday. It did not name the jurisdictions under review or say how many would be included.

Key points

• The review focuses on jurisdictions with "materially important" virtual asset service provider (VASP) activity. VASPs are businesses that provide crypto services, such as exchanges or wallet providers.


• Initial findings are due in June 2027, with further results in October 2027.


• A July FATF report found that 83% of surveyed jurisdictions had adopted crypto Travel Rule legislation.


• Of the 91 jurisdictions with Travel Rule laws, 55 had not taken supervisory or enforcement action over compliance.

What the FATF announcement says

The FATF said its regular assessments and follow-up procedures will remain the main tools for evaluating compliance. The targeted review will take each jurisdiction's existing assessment status into account. The review will be followed by monitoring and faster reporting to track progress in fixing deficiencies.

What the earlier FATF report found

The move follows a July FATF report on crypto enforcement. That report showed significant enforcement gaps persisted even though most surveyed jurisdictions had adopted Travel Rule legislation. The Travel Rule requires crypto service providers to share information about the sender and recipient of transfers. Authorities also reported difficulty identifying unlicensed crypto businesses and overseeing providers that serve local customers from overseas.

What is confirmed

• The FATF announced a targeted review of jurisdictions with significant crypto activity.


• Initial findings will be published in June 2027, with further results in October 2027.


• 83% of surveyed jurisdictions had adopted crypto Travel Rule legislation, according to a July FATF report.


• 55 of 91 jurisdictions with Travel Rule laws had yet to take supervisory or enforcement action over compliance.

What is still unclear

• The FATF did not name the jurisdictions under review.


• The FATF did not say how many jurisdictions would be included.


• Cointelegraph contacted the watchdog for further details but had not received a response by publication.

Why this matters

The review focuses on whether governments are actually enforcing anti-money laundering rules for crypto businesses, not just passing laws. The July report found that many jurisdictions with Travel Rule legislation had not taken enforcement action, suggesting a gap between rules on paper and supervision in practice.

What happens next

Initial findings from the targeted review are expected in June 2027, followed by further results in October 2027. The FATF will also use monitoring and faster reporting to track progress in addressing deficiencies.

Sources

• FATF


• Cointelegraph