FATF’s Seventh Targeted Update on VA/VASPs warns that gaps in licensing, supervision and Travel Rule implementation continue to be exploited, with stablecoins emerging as a growing illicit finance risk

It also highlights increasingly complex illicit finance risks, including the industrialisation of crypto-enabled fraud by organised crime groups, the growing misuse of stablecoins, risks associated with unhosted wallets and peer-to-peer transactions, offshore VASPs operating outside effective oversight, and persistent challenges posed by decentralised finance (DeFi). FATF calls on both the public and private sectors…