FATF reports poor implementation of Crypto Travel Rule.

The Financial Action Task Force has issued a new request to countries to implement the “Travel Rule” to combat money laundering and terrorism financing activities facilitated by cryptocurrencies.

The United Nations body, whose role is to promote strategies to combat money laundering and terrorist financing, explained that “many” member states have not implemented the rule following a series of meetings at its headquarters in Paris.

FATF urged countries to implement Anti-Money Laundering and Counter-Terrorism Financing measures on crypto-related activities “without delay” to prevent “criminals” from exploiting “significant loopholes” not protected by regulation.

FATF claimed โ€œmore than halfโ€ of respondents in a survey said they had taken no action to implement the rule.

A March 2022 survey by FAFT found only 29 of 98 jurisdictions at the time passed the requirements needed as part of the travel rules and a small subset of these jurisdictions had started enforcement.

The FAFT travel rule was implemented to target the anonymity of illegal cryptocurrency transactions. It was introduced in June 2019 and last updated in June 2022. A further update of the rules was agreed to by FATF members at the meetings.

FAFT said it would publish a report on June 27 calling on member countries to implement its recommendations in order to close the loopholes which it says criminals look to exploit.

The report will make mention of North Korea’s illicit virtual asset activities, where stolen funds are then allegedly funneled into its Weapons of Mass Destruction program, FAFT said. Illicit activities from other “emerging risks,” such as stablecoins, decentralized finance, nonfungible tokens and peer-to-peer transactions, will also be discussed in the report, it added.

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