FATF’s crypto checklist hints at the next regulatory crackdown

The Financial Action Task Force (FATF) is signaling a forthcoming regulatory crackdown on the cryptocurrency sector, with a particular focus on stablecoins and decentralized finance (DeFi).

According to its June 2025 report, while significant progress has been made globally in implementing AML/CFT (Anti-Money Laundering/Counter-Terrorist Financing) standards—such as the Travel Rule, now adopted by 73% of eligible jurisdictions—important gaps remain, especially in risk assessment, licensing, and oversight of offshore crypto platforms.

The FATF has highlighted the increasing use of stablecoins and DeFi in illicit finance activities, including exploitation by North Korean actors and other criminal networks. It plans to release targeted guidance papers on stablecoins, offshore platforms, and DeFi by summer 2026, indicating these areas will face intensified regulatory scrutiny soon.

Additionally, the FATF’s latest updates emphasize the need for stronger global cooperation and enforcement to address vulnerabilities in the crypto ecosystem, which remains borderless and prone to fraud and scams estimated to have caused over $50 billion in illicit on-chain activity in 2024.

The FATF is also expanding its monitoring of jurisdictions with significant virtual asset activity to ensure consistent application of its standards worldwide.

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