Cryptocurrency regulations are increasingly aligned with global standards; 73% of eligible jurisdictions have now passed the laws to implement the travel rule of the Financial Action Task Force (FATF).
The Travel Rule requires crypto service providers to collect and share users’ transaction data, similar to traditional financial requirements. On June 26th, the FATF released Its annual report outlines how recent regulations that move through the constituents convert its global anti-money laundering (AML) framework.
This is a direct result of a year’s FATF campaign to bring cryptocurrencies in accordance with the traditional AML standards and counter-terrorist financing (CFT).
FATF Spotlighted Stablecoins and Decentralized Finance (DEFI) for the second consecutive year, emphasizing their rising use of illicit finances, including North Korean actors. The organization said it plans to release targeted papers in Stablecoins, Crypto platforms outside the country and DEFI next day, indicating where Global Crypto regulation can go.
How the fatf became the backbone of crypto regulation
FATF’s travel rule is expanded To cover cryptocurrencies and exchange in 2019 as part of the organization’s standards in AML/CFT. Added it to RECOMMENDATION 15 (R.15) – One of the 40 FATF recommendations – as a note of interpretation.
Of the 138 jurisdictions, only one was achieved by the full compliance with R.15 in 2025. Meanwhile, 40 constituents were reviewed as “mainly compliant,” from 32 in 2024. Three constituents were removed from the non -compliance category.
Compliance means that a constituency has enacted laws that require license or registration of virtual asset service providers (VASP)-such as cryptocurrency exchanges and trading platforms-or identified legal people who conduct Vasp-related activities. The licensing requirements throughout the constituents are “very similar,” including regions paying branded as “crypto hubs,” such as Singapore, Dubai and Hong Kong, Joshua Chu, co-chair of the Hong Kong Web3 Association, told Cointelegraph.
Singapore financial authority, the city-state’s central bank, recently released A Warning In crypto exchanges engaged in regulatory arbitration by avoiding a local license and relying solely on foreign customers. The exchanges are advised to get licensed or exit by the end of June.
Related: Singapore’s released crypto companies may not find shelter elsewhere
The move caused a debate about whether Singapore was actually aimed at becoming a powerhouse for digital assets. Some in the industry Forecasting That Hong Kong can benefit most from the region’s rival rival in unlicensed exchanges.
Chu warns that those looking for greener pastures with competing crypto hubs can end failure, as everyone complies with the same FATF requirements. In fact, Singapore has released more Crypto licenses than Hong Kong.
“The regulators are also deadline fighters. So, they will make last minute announcements (probably know the (fatf) draft of the report at that point) to see how they can improve their position before the formal report comes out,” Chu said.
“As a result, many constituents have accelerated efforts to tighten controls, improve risk assessments and implement FATF travel rule. FATF’s June 2025 report reflects this urgent, showing that while developing is made, significant gaps remain in the analysis of the danger, loneliness and implementation.”
Hong Kong also has also protected to roll additional crypto policies. In May, the upcoming stablecoin ordinance passed The legislative council. The city was then A -updated policy statement released In connection with the FATF report.
The FATF said the increasing number of constituents has now decided on how they want to fix their -their crypto sectors, with 82% of 163 respondents say they recognized their preferred regulatory approach. There are two main jurisdictions of the direction may take: to allow or to prohibit, with restrictions from slightly to blanket restrictions.
The ban is becoming more common in the middle of the Middle East and the North Africa Financial Action Task Force and Eastern and Southern Africa Anti-Money Laundering Group members. However, the FATF warns that jurisdictions should be considered carefully this procedure, as the whole ban can be intensive resource and difficult to implement.
“When the constituents choose to ban instead of repairing, they do not eliminate the presence of crypto within their boundaries. Instead, they removed the administration, implementation of leverage and visibility in the forbidden flow,” Hedi Navazan, chief compliance officer of the 1inch labs and vice chair of the digital asset task force of global coalitions, said the global coalition of the Global Coastic Coastic, said the Global Coastic In cointelegh.
“Let’s be true, crypto is endless,” he added.
China, a member of the FATF, has slightly forbids cryptocurrency -associated activities, such as transactions and mining. But the decentralized nature of blockchain technology still produces cryptocurrencies mainly accessible to the public. Although Beijing banned Bitcoin (Btc) Mining, Chinese mining pools continue to control the Most network hashrate.
Stablecoins and defi under the fatf spotlight
Stablecoins and Defi have gained their own sections in the FATF report for the second consecutive year in the latest update.
Stablecoins, in particular, belong to Biggest story in crypto In 2025 to this day, with major jurisdictions advanced in legislative measures for Stablecoin licensing, including the Genius Act in the US, opening doors for tech firms to launch private stablecoins. The European Union has even pushed the crypto-assets regulation (MICA) regulation, which sets rules for stablecoin providers.
Related: The Senate passes the Genius Stablecoin Bill amidst concerns with systematic risk
But Stablecoins are increasingly tied to illicit activities, including the hope of North Korean actors suspected of funding the State Weapon program, with industry estimates suggesting 63% of the reduced volume transactions are denominated with stablecoins.
“Stablecoins, especially the USDT on the Tron Network, usually became a tool for illicit actors. From North Korean hackers to scam networks … this is not just a niche problem,” Navazan said.
Despite the growing attention of regulation, most of the constituents are still struggling to apply FATF standards to rugged. According to a FATF’s 2025 report, nearly half of the constituents who implemented or employed the travel rule say some DeFI platforms should be licensed as Vasp, but most do not recognize any such creatures in training.
With 47 jurisdictions claiming the defi may fall under Vasp regulation, 75% has yet to find or license a single defi platform.
Disappointment -Background FATF standards can exclude an economy
FATF influence is emerged within the United Nations framework, with many resolutions at the UN Security Council Encouraging Member States to implement FATF standards.
“This means that the constituents are facing strong, concrete incentives to align their laws to emerging FATF standards, not only in good mood but to avoid serious consequences,” Chu said.
The Gray List serves as a powerful implementation tool for FATF, as it places an area under increasing monitoring, resulting in economic and reputation consequences. The Budding Crypto Hub Dubai was once on the color list before the United Arab Emirates was removed in 2024.
“While FATF is not making law, you will be silly to ignore it. When the FATF speaks, regulators are listening around the world. That’s how it always worked,” Navazan said.
“If your country is not aligned with those standards, it is not just a risk to a bad rating – the risk of being isolated.”
FATF statements, including its annual Crypto updates, have offered a preview where global regulations are going. In the stablecoins and defi emerging as major remembrance areas in 2025, FATF’s planned research in these sectors is expected to shape the next wave of compliance steps.
