Criminals Now Launder Most Crypto Crime Through Stablecoins, FATF Finds

FATF finds 83% of jurisdictions passed Travel Rule laws

The Financial Action Task Force (FATF) published its seventh Targeted Update on virtual assets on 16 July 2026. The report found that 83% of surveyed jurisdictions have passed legislation implementing the Travel Rule, up from 73% in 2025. A further 11 jurisdictions reported that implementation is under way. The update assesses compliance with FATF Recommendation 15, which applies anti-money laundering and counter-terrorist financing (AML/CFT) rules to virtual asset service providers (VASPs). FATF said many jurisdictions have not yet turned legal frameworks into effective supervision and enforcement.

Criminals move billions through gaps in national frameworks

FATF warned that organised crime groups exploit uneven implementation to move billions in illicit proceeds. The report cited a Cambodia-based financial services conglomerate that laundered at least USD 4 billion between 2021 and 2025. That single infrastructure served both organised crime fraud schemes and cyber theft linked to the Democratic People's Republic of Korea (DPRK). In June 2025, the Spanish Guardia Civil dismantled a cryptocurrency fraud network that laundered about EUR 460 million from more than 5,000 victims worldwide.

Stablecoins now carry most identified on-chain illicit activity

The report found that most identified on-chain illicit activity now involves stablecoins. Misuse by DPRK actors and terrorist financiers has increased since the 2025 update. FATF flagged an emerging risk: some criminal networks have begun developing proprietary stablecoins designed to resist freezing and asset seizure. The watchdog also pointed to decentralised finance (DeFi) platforms and offshore VASPs as growing regulatory gaps that many jurisdictions struggle to assess.

USDC held near one dollar with a large market cap

Stablecoins remain among the largest virtual assets by size. USDC traded at USD 1.00 with a market capitalisation of about USD 73.17 billion at the time of publication (CoinPaprika, 17 July 2026). Its 24-hour trading volume reached roughly USD 12.4 billion (CoinPaprika, 17 July 2026). The scale of these dollar-pegged tokens explains why FATF placed stablecoin supervision at the centre of its priority actions for governments and the private sector.

UK presidency pledges faster action on virtual assets

The report arrived at the start of the United Kingdom's FATF Presidency, which has committed to tackling fraud and accelerating work on virtual assets. Jurisdictions with materially important VASP activity make up about 97% of the global virtual asset market. FATF President Giles Thomson urged governments and the private sector to close regulatory gaps and strengthen cross-border co-operation.

"Effective implementation of the FATF Standards can no longer be delayed. Governments and the private sector must work together to strengthen preventive measures and close regulatory gaps, bolster cross-border co-operation and deny criminals the opportunity to exploit weak links in the global system.", 16 July 2026. — Giles Thomson, President, FATF

Primary source: Source ↗