The Financial Action Task Force has published its seventh targeted update on implementation of Recommendation 15 for virtual assets and virtual asset service providers, concluding that jurisdictions have continued to make progress since the 2025 update but have not yet translated that progress into consistently effective supervision and enforcement. The report says more jurisdictions are conducting risk assessments, choosing regulatory approaches, licensing or registering VASPs, implementing the Travel Rule and taking supervisory action, yet significant weaknesses remain in turning risk findings into mitigation measures, operationalising licensing and registration frameworks, identifying firms and individuals conducting VASP activity, and enforcing risk-based oversight. Across 149 assessed jurisdictions, 34% were rated largely compliant with Recommendation 15, 43% partially compliant and 22% non-compliant, while only one jurisdiction was fully compliant. In the 2026 survey, 86% of respondents said they had conducted a virtual asset and VASP risk assessment, 89% had decided how to regulate the sector, and 83% of relevant respondents had passed legislation implementing the Travel Rule. However, enforcement remains limited. Almost half of jurisdictions with Travel Rule legislation had not yet taken related supervisory or enforcement action, only 58% of surveyed jurisdictions reported having licensed or registered a VASP in practice, and DeFi oversight remains especially weak, with only four jurisdictions imposing licensing or registration requirements on qualifying arrangements and only two having done so in practice. The report also highlights rising risks from organised crime-linked fraud, stablecoin misuse, peer-to-peer transactions through unhosted wallets, offshore VASPs operating outside effective oversight, and continuing difficulties in addressing DeFi. The report recommends that jurisdictions with materially important VASP activity accelerate effective implementation of Recommendation 15, with those that have not yet implemented it prioritising risk assessments and legal frameworks, and those with frameworks in place focusing on practical supervision and enforcement. It also calls for stronger domestic, international and public-private cooperation, and says the FATF will continue monitoring implementation and emerging risks through its assessment, risk analysis and capacity-building work.
Financial Action Task Force2026-07-16
Financial Action Task Force finds modest progress but persistent gaps in implementation of virtual asset standards
The Financial Action Task Force said implementation of its virtual asset standards has improved, but major gaps remain in licensing, supervision, enforcement and risk mitigation. In its latest survey, 86% of respondents had conducted risk assessments and 83% had passed Travel Rule legislation, yet practical oversight of VASPs, offshore providers and DeFi remains uneven. The report also flags growing risks from organised crime fraud, stablecoins, unhosted wallets and offshore VASPs.