The Financial Action Task Force (FATF) announced the launch of a targeted review of compliance with international standards governing virtual assets (VAs) and virtual asset service providers (VASPs).
FATF, an intergovernmental organization that develops international standards to combat money laundering and terrorist financing, announced an additional assessment of jurisdictions with significant cryptocurrency service provider activity. The initiative aims to accelerate the implementation of FATF standards and address gaps in national cryptocurrency regulations.
According to FATF, implementation of international requirements for virtual assets remains uneven. Criminal organizations continue to use cryptocurrencies for illicit activities, exploiting the cross-border nature of these assets and regulatory differences between jurisdictions.
The targeted review will focus primarily on jurisdictions with materially important virtual asset service provider activity (MIVA), taking into account their current FATF compliance assessment status.
As part of the initiative, FATF plans to:
- conduct targeted assessments of compliance with FATF standards for virtual assets and VASPs;
- establish follow-up monitoring to address identified deficiencies;
- introduce an accelerated reporting process to improve regulatory accountability and transparency;
- expand engagement with relevant jurisdictions, including training and regulatory capacity-building programs.
FATF will pay particular attention to compliance with Recommendation 15 (R.15), which governs the application of a risk-based approach to new technologies, including virtual assets and VASP activities.
FATF also plans to continue direct engagement with national regulators to accelerate implementation and address identified gaps. The new procedure won’t replace the existing mutual evaluation system. Instead, it will serve as an additional mechanism for monitoring compliance with standards in the cryptocurrency sector, complementing the existing Mutual Evaluations and Follow-up processes, which remain FATF’s primary tools for assessing compliance with international standards.
FATF will publish the first results of the targeted review in June 2027, with additional findings scheduled for October 2027.
The FATF initiative followed a call from the G20 to accelerate the implementation of international digital asset regulatory standards, with particular emphasis on compliance requirements for virtual assets and VASPs.
