Updated Report on Anti-Money Laundering and Terrorist Financing in Cryptocurrency
On June 27, the Global Financial Task Force (FATF) published its sixth update report on anti-money laundering and terrorist financing measures related to cryptocurrencies and virtual asset service providers (VASPs). The report highlights significant progress in improving legal frameworks and enhancing supervision, though challenges remain in licensing, VASP registration, and risk management from foreign VASPs.
Challenges in VASP Licensing and Risk Management
Despite countries establishing many standard regulations, implementation still contains numerous loopholes that make identifying and monitoring VASPs insufficiently rigorous. Risks arising from VASPs located in loose, hard-to-control legal jurisdictions create opportunities for cryptocurrency fraud and abuse. This bottleneck requires comprehensive, multilateral solutions.
Serious Security Incident: North Korean Hackers Attack Bybit
The report also revealed a serious incident this year: a North Korean hacker group stole $1.46 billion in digital assets from Bybit exchange. The asset recovery rate currently stands at only 3.8%, reflecting significant challenges in digital asset recovery. This event demonstrates an urgent need for international cooperation in asset restoration and preventing similar attacks.
Illegal Cryptocurrency Transactions Surge
Predictions for 2024 suggest total on-chain illegal transaction values related to fraudulent activities will reach $51 billion. This is a warning sign about the complex use of cryptocurrencies for fraud, money laundering, and terrorist activities, threatening global financial system stability.
Call for Strengthening International Management Cooperation
FATF emphasizes that accelerating cross-national collaboration in monitoring, investigating, and handling cryptocurrency-related violations is crucial. Establishing strict standards, advanced technical tools, and effective information exchange mechanisms will help prevent criminals from using cryptocurrencies as money laundering and terrorist financing tools, protecting global financial security.
