Global watchdog FATF launches comprehensive review of cryptocurrency centers' AML compliance
The international watchdog will examine jurisdictions hosting substantial cryptocurrency operations to assess their implementation of anti-money laundering regulations, with preliminary results expected by June 2027.
An intergovernmental watchdog known as the Financial Action Task Force (FATF) has initiated a focused examination of countries and territories where cryptocurrency activity is substantial, aiming to identify shortcomings in how national authorities implement international anti-money laundering regulations.
The FATF, which serves as the global standard-setting organization for combating money laundering, disclosed on Friday that its examination would concentrate specifically on jurisdictions hosting virtual asset service provider (VASP) activity deemed "materially important," while considering their current evaluation standing.
According to the organization, its standard evaluation processes and follow-up mechanisms would continue to serve as the primary instruments for measuring jurisdictions' adherence to established standards.
Preliminary conclusions from the examination are scheduled for release in June 2027, with additional outcomes expected in October 2027. Following the review, enhanced monitoring procedures and accelerated reporting mechanisms will be implemented to measure advancement in resolving identified weaknesses.
The organization declined to disclose which specific jurisdictions would be subject to examination or indicate the total number of territories to be included in the review. Cointelegraph reached out to the watchdog seeking additional information but did not receive any response prior to publication.
This initiative comes after the FATF published a report in July revealing that 83% of jurisdictions surveyed had implemented legislation related to the crypto Travel Rule, though substantial gaps in enforcement remained prevalent.
According to the findings, 55 out of 91 jurisdictions that had enacted Travel Rule legislation had not yet conducted any supervisory or enforcement activities regarding compliance with the requirements. Government agencies also encountered difficulties in detecting unlicensed cryptocurrency operations and maintaining oversight of service providers operating from foreign locations while serving domestic clients.
Under the Travel Rule framework, cryptocurrency service providers must exchange identifying information concerning both the originator and beneficiary of digital asset transfers.