FATF Annual Report 2023-2024 Highlights Global Push for Virtual Asset Regulation

The Financial Action Task Force (FATF) has unveiled its 2023-2024 Annual Report, emphasizing significant strides in combating financial crime, with a particular focus on the regulation of virtual assets. The global watchdog has, for the first time, published a list of jurisdictions with “materially important” virtual asset service provider (VASP) activity, marking a critical step in its efforts to curb the misuse of digital assets for illicit activities.
The report underscores the FATF’s commitment to ensuring that virtual asset service providers comply with its standards, which are designed to prevent money laundering, terrorist financing, and other financial crimes. The listed jurisdictions have been recognized for their efforts to implement the FATF’s requirements, including the “Travel Rule,” which mandates that VASPs share transaction information to enhance transparency.
“The rapid growth of virtual assets presents both opportunities and risks,” said T. Raja Kumar, President of the FATF under the Singapore Presidency. “By identifying jurisdictions with significant VASP activity and tracking their progress, we aim to foster a more secure and compliant global virtual asset ecosystem.”
The FATF’s move comes amid rising concerns over the exploitation of virtual assets for cyber-enabled fraud, ransomware attacks, and other illicit activities. The report highlights the need for a risk-based approach to regulation, ensuring that measures are proportionate and effective without stifling innovation in the digital asset space.
In addition to its focus on virtual assets, the FATF has made progress in other areas, including strengthening global compliance with its standards, improving transparency in beneficial ownership, and enhancing asset recovery mechanisms. The organization has also prioritized deepening collaboration with its regional partners and promoting gender inclusivity within its network.
The publication of the VASP list is expected to increase pressure on jurisdictions to accelerate their adoption of FATF standards, particularly as the global financial system grapples with the evolving challenges posed by digital assets. Industry stakeholders have welcomed the move, noting that clearer regulatory frameworks could boost investor confidence and foster sustainable growth in the virtual asset sector.
As the FATF prepares for its next round of mutual evaluations, the focus on virtual assets is likely to remain a key priority, with the organization continuing to monitor emerging risks and adapt its standards to address new threats.
The full report is available on the FATF’s official website, providing detailed insights into its ongoing efforts to safeguard the integrity of the global financial system.
https://www.fatf-gafi.org/content/dam/fatf-gafi/annual-reports/FATF-AR-2023-2024.pdf.coredownload.pdf