FATF Updates Standards on Virtual Assets and VASPs

Key updates include:

➡️ Implementation Gaps Remain: 83% of surveyed jurisdictions have now implemented legislation for the Travel Rule, up from 73% in 2025, but FATF stresses that many authorities have yet to deliver effective supervision, licensing and enforcement;

➡️ Supervisory Expectations: FATF highlights the need for stronger regulation, registration and oversight of (VASPs), particularly in jurisdictions with significant virtual asset activity where criminals continue to exploit weaknesses;

➡️ Emerging Risk Areas: The report identifies offshore VASPs, decentralised finance (DeFi), unhosted wallets and stablecoins as priority areas requiring enhanced risk assessment and regulatory attention; and

➡️ International Cooperation: FATF emphasises that stronger cross-border information sharing, asset freezing and enforcement cooperation are essential to disrupting increasingly global virtual asset-enabled crime.

✅ The report calls on public authorities and the private sector to strengthen risk-based supervision, improve implementation of the Travel Rule and address emerging risks.

✅ Firms should review virtual asset risk assessments, and VA transaction monitoring controls reflect the evolving risks associated with VASPs, DeFi, and stablecoins.