FATF Reports Stablecoins Account for Majority of Illicit On-Chain Activity
Stablecoins now represent the majority of illicit on-chain activity, as reported by the Financial Action Task Force (FATF).
- Mass adoption of stablecoins increases risks of illicit finance, particularly due to inconsistent regulation across jurisdictions.
- The FATF estimated around $51 billion in illicit on-chain activity linked to fraud and scams for 2024.
- Stablecoins have seen growth partly due to regulatory advancements in the U.S. and elsewhere.
- Total market cap of stablecoins surpassed $250 billion for the first time earlier this month.
- The FATF emphasized the need for compliance with the "travel rule" to mitigate money laundering and terrorist financing.
- 99 jurisdictions have implemented or are working on travel rule legislation but face challenges identifying involved parties in virtual asset service provider activities.
- A report from Notabene indicated that almost all surveyed cryptocurrency firms expect to comply with the travel rule by the end of the year.