2025 FATF Targeted Update Summarised
The Financial Action Task Force (FATF) has released its 2025 Targeted Update on Implementation of the FATF Standards on Virtual Assets/VASPs
This blog breaks down the FATF’s key findings from 2025 and compares them with the 2024 update. We compare 2025’s findings with 2024, explore how jurisdictions are progressing with Recommendation 15 (R.15) and Travel Rule legislation and enforcement, and the next steps for the FATF and the Virtual Assets Contact Group (VACG).
TL;DR: 2024 and 2025’s Findings Compared
The FATF 2025 update shows moderate progress in implementing AML/CFT standards for virtual assets and VASPs. Of the 138 jurisdictions assessed, 29% were largely compliant with R.15 (up from 25% in 2024), while non-compliance dropped from 25% to 21%. More jurisdictions are conducting virtual asset risk assessments (76% in 2025 vs. 71% in 2024), and 82% have defined their regulatory approach.
However, gaps remain in licensing, supervision, and enforcement, with only 33% requiring licensing in practice. While 73% of jurisdictions passed legislation for the Travel Rule by 2025 (up from 69%), 59% had yet to enforce it.
Regulation of DeFi and stablecoins continue to pose challenges. Nearly half of advanced jurisdictions require specific DeFi arrangements to be licensed, though few have identified or acted against non-compliant entities.
Stablecoins now account for most on-chain illicit activity, with DPRK-linked actors stealing $1.46 billion in 2025. To address these risks, the FATF emphasises stronger enforcement, improved supervision, and public-private collaboration. Guidance on stablecoins, DeFi, and offshore VASPs will be released between late 2025 and mid-2026 to support further implementation.
Background on Report - Statistics Used
This report, the Targeted Update on Implementation of the FATF Standards on Virtual Assets/VASPs, is based on the following statistics and findings:
A 2025 survey of R.15’s implementation over 163 jurisdictions (35 FATF members and 128 FSRB members); responses were self-reported and varied due to conditional branching logic.
Non-respondents (42 of 205) are assumed to have made no progress on R.15 and R.16 (Recommendation 16),
FATF VACG meetings through late 2024 and early 2025, including consultations with the virtual asset private sector in April 2025.
Results from FATF mutual evaluation and follow-up reports assessing R.15, as of April 2025.
Jurisdictions’ Implementation of FATF Standards on VAs/VASPs (R.15)
As of April 2025, 138 jurisdictions have been assessed for compliance with FATF standards on virtual assets and virtual asset service providers (VASPs), specifically under R.15 and its Interpretive Note (INR.15). Global implementation has slightly improved since 2024: 29% of jurisdictions (40 of 138) are now largely compliant (up from 25% in 2024), while the proportion of non-compliant jurisdictions decreased to 21% (from 25%). However, 49% remain only partially compliant. Only one jurisdiction remains fully compliant, as in 2024.
Progress was noted in international cooperation and information exchange, but challenges persist, especially in conducting risk assessments, identifying VASP entities, and implementing the Travel Rule.
In the March 2025 FATF survey, 76% (124 of 163 jurisdictions) reported conducting ML/TF risk assessments for virtual assets and VASPs, up from 71% in 2024. However, only 40 of 138 jurisdictions met or mostly met the criteria for applying a risk-based approach.
Implementation of FATF’s Travel Rule
As of the 2025 survey, 73% (85 of 117) of jurisdictions, excluding those that prohibit or plan to prohibit VASPs, have passed legislation implementing the Travel Rule, up from 65 in 2024.
An additional 14 of the 117 jurisdictions are in the process of implementation, compared to 2024’s 15 of 80 jurisdictions. However, 42 of the 205 jurisdictions did not respond to the survey, suggesting non-implementation and indicating that global coverage remains incomplete.
Enforcement of the Travel Rule remains limited, though some progress has been made since 2024. Of the 85 jurisdictions that have enacted Travel Rule legislation, 59% (50 jurisdictions) have yet to issue findings, directives, or take enforcement or supervisory actions related to compliance. This is likely because many jurisdictions only recently adopted the legislation and are currently focused on building supervisory frameworks.
In addition, some may be prioritising engagement with VASPs, managing ongoing enforcement cases, or supporting remediation efforts. The FATF has urged jurisdictions to operationalise the Travel Rule swiftly and has issued a guidance paper, Best Practices in Travel Rule Supervision paper (FATF/PDG(2025)18), to support effective enforcement.
The Next Steps for the FATF and VACG
As part of the VACG Work Programme, the FATF and VACG will publish targeted papers on stablecoins, offshore VASPs, and DeFi between October 2025 and June 2026. They will continue focused outreach in areas of concern, such as conducting risk assessments, defining jurisdictional approaches to the use of virtual assets and VASPs based on those assessments, identifying natural persons or legal entities conducting VASP activities, and implementing the Travel Rule.
Efforts will also be made to promote consistent and timely implementation, supervision, and enforcement of Travel Rule requirements.
In 2026, the FATF will publish the next Targeted Update, reporting on jurisdictions’ progress in implementing R.15, their regulatory responses to emerging virtual asset risks, and an updated public table highlighting jurisdictions with materially significant VASP activity.
Parting Thoughts
The 2025 Targeted Update reveals incremental but meaningful progress in global compliance with the FATF’s virtual asset standards, particularly in legislative adoption and risk assessments.
However, enforcement and supervision continue to lag behind, limiting the practical impact of these developments. While more jurisdictions have passed laws to implement the Travel Rule and defined regulatory approaches to virtual assets and VASPs, many have yet to translate these frameworks into effective action.
Looking ahead, the FATF and VACG’s planned guidance on stablecoins, DeFi, and offshore VASPs, alongside continued outreach, will be crucial in addressing gaps.
Source: Targeted Update on Implementation of the FATF Standards on Virtual Assets/VASPs
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