FATF Releases 7th Update on Virtual Asset Standards, Calls for Closing Regulatory Gaps

ChainCatcher report: According to the latest report released by the Financial Action Task Force (FATF), FATF has conducted its seventh专项 assessment on the implementation of Recommendation 15 (R.15) across global jurisdictions. The report notes that since the last update in 2025, countries have continued advancing regulation of virtual assets (VAs) and virtual asset service providers (VASPs), including conducting risk assessments, refining licensing and registration frameworks, implementing the Travel Rule, and strengthening enforcement actions. However, the report also highlights significant gaps, primarily in: the ineffective translation of risk assessment outcomes into mitigation measures, insufficient implementation and enforcement of licensing and registration frameworks, difficulties in identifying entities engaged in VASP activities, and inadequate risk-based supervision and enforcement effectiveness. Regarding emerging risks, the report focuses on the following areas: the increasing industrialization of fraud involving virtual assets by organized crime groups, rising risks of stablecoin misuse, risks associated with peer-to-peer (P2P) transactions via non-custodial wallets, offshore VASPs operating outside regulatory oversight, and ongoing challenges in the DeFi space. FATF calls for enhanced collaboration between public and private sectors to strengthen implementation of R.15, improve risk mitigation capabilities, and deepen domestic, international, and public-private cooperation mechanisms.