Council of Europe’s MONEYVAL issues report on virtual assets warning of sanctions evasion and incomplete travel rule implementation

The Council of Europe’s anti-money laundering body, MONEYVAL, published a report reviewing how virtual assets and virtual-asset service providers (VASPs) are being used for money laundering, terrorist financing and sanctions evasion, and assessing how jurisdictions are regulating and supervising the sector. The horizontal review finds progress in regulatory and supervisory frameworks and international cooperation, but highlights persistent gaps, particularly around preventing the use of virtual assets to circumvent targeted financial sanctions. Based on information from 25 MONEYVAL jurisdictions, 81% now require VASPs to be licensed or registered and more than 90% have designated supervisory authorities, yet enforcement against unlicensed operators remains weak. Implementation of the Financial Action Task Force travel rule under Recommendation 16 is still incomplete, with only 46% of jurisdictions having operationalised requirements to collect, transmit and make available originator and beneficiary information for virtual-asset transfers. The report also flags emerging risks including sanctions evasion, fraud, proliferation financing and child exploitation, and notes that limited data collection often leaves jurisdictions without structured insight into cross-border virtual-asset flows. MONEYVAL calls for further action to integrate targeted financial sanctions and proliferation financing risks into national assessments, improve the quality of suspicious activity reporting from VASPs, strengthen investigatory capabilities across competent authorities and the private sector, and step up capacity building, guidance and cross-border cooperation to keep pace with the sector’s rapid development.