New MONEYVAL Report on VAs, VASPs & AML/CFT

Key developments include:

➡️ Framework Development: The report finds that regulatory and supervisory frameworks strengthened significantly since the last report, but operational and enforcement gaps remain;

➡️ Licensing & Supervision: 81% of jurisdictions now require VASPs to be licensed or registered, and over 90% have designated supervisory authorities;

➡️ Risk Assessments: Jurisdictional risk assessments on VAs and VASPs are widespread but depth and quality vary;

➡️ Travel Rule: Only 46% of jurisdictions implemented the Financial Action Task Force #FATF Travel Rule for VASPs;

➡️ Sanctions & Proliferation Risk: Virtual assets are increasingly exposed to sanctions evasion, fraud and proliferation financing risks;

➡️ Data Limitations: Insufficient data collection reduces visibility over cross-border virtual asset flows and limits effective risk analysis; and

➡️ SAR Quality Concerns: The report calls for improved suspicious activity reporting #SAR by VASPs and stronger integration of sanctions and proliferation financing risks into national risk assessments.

✅ Firms should treat virtual assets as a core financial crime risk area, ensuring robust AML controls, effective sanctions screening, risk-based transaction monitoring and enhanced due diligence where virtual asset exposure is identified.