Stablecoins now account for most identified on-chain illicit activity, while governments are still struggling to enforce the crypto rules already on their books, the Financial Action Task Force, a global money-laundering standards body, said Thursday.
- Of the 109 jurisdictions that answered FATF's Travel Rule question, 91, or 83%, said they had passed legislation requiring crypto service providers to collect and transmit sender and recipient information.
- But 55 of those jurisdictions hadn't taken any Travel Rule-focused supervisory or enforcement action, per the report.
Among 149 assessed jurisdictions, only one was fully compliant with FATF's crypto standards, while 51 were largely compliant, 64 were partially compliant and 33 weren't compliant at all.
FATF pointed to Huione Group, a Cambodian financial conglomerate that U.S. authorities say laundered at least $4 billion between 2021 and 2025, including $37 million from North Korean cyber thefts.
After Tether froze more than $29 million in USDT linked to Huione, the group launched its own dollar-pegged token, USDH, which was marketed as resistant to freezes and regulatory control.
- Industry data support FATF's warning about stablecoins.
- Chainalysis, a blockchain analytics firm, estimated that stablecoins represented 84% of identified illicit crypto volume in 2025.
- TRM Labs, another blockchain forensic firm, put illicit crypto flows at $158 billion, although that was only 1.2% of overall on-chain volume.
Only 26 of 142 surveyed jurisdictions had assessed DeFi-related risks, while four had imposed licensing or registration requirements and two had registered a DeFi arrangement in practice, per the report.
FATF said regulators should move from passing legislation to supervising crypto companies, enforcing the Travel Rule and improving cross-border asset freezes.