FATF Report: 83% Jurisdictions Enact Travel Rule Amid Rising Stablecoin Abuse

FATF's seventh update notes 83% adoption of travel rules, yet organized crime exploits gaps for billions in illicit flows, including North Korean-linked stablecoin schemes.

Woofun AI reports that the Financial Action Task Force (FATF) published its seventh special update on virtual asset regulation implementation. The document indicates that while legislative adoption is increasing, enforcement lags, allowing criminal groups to move billions in illicit funds. Data shows 83% of surveyed jurisdictions have enacted "travel rule" provisions, rising from 73% in 2025, with 11 others working on implementation.

The report highlights persistent challenges in identifying Virtual Asset Service Providers (VASPs) and managing risks from offshore entities and DeFi platforms. Notable trends include the abuse of stablecoins by North Korea-linked actors and terrorist financiers, who are developing proprietary coins to evade asset freezes. Cited cases include a Cambodian group laundering $4 billion between 2021 and 2025, and Spain’s National Guard dismantling a €460 million crypto fraud network in June 2025. FATF Chair Gilles Thomson emphasized the need for strengthened public-private cooperation to close regulatory gaps.