FATF publishes targeted update and guidance on virtual assets and VASPs

The Financial Action Task Force (FATF) has published its sixth targeted update on the implementation of its standards for virtual assets (VAs) and virtual asset service providers (VASPs), alongside an updated webpage. The report assesses global progress in applying anti-money laundering and counter-terrorist financing (AML/CFT) measures to VAs and VASPs, noting improvements in regulation and enforcement. However, challenges remain and the report sets out key recommendations on: (i) risk assessment and policy approach to VASPs; (ii) licensing/registering and supervising VASPs; (iii) implementation of the Travel Rule; (iv) addressing emerging and increasing risks related to stablecoins and decentralised finance arrangements; and (v) recommendations for the private sector.

In parallel, FATF has also released Best Practices on Travel Rule Supervision, providing more detailed guidance to assist jurisdictions in effectively supervising compliance with the Travel Rule for VASPs. The guidance offers practical examples and supervisory approaches to address common implementation challenges.

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