On June 26th, 2025, the Financial Action Task Force (FATF) released its sixth targeted review of the implementation of FATF Standards on Virtual Assets (VAs) and Virtual Asset Service Providers (VASPs). This targeted review provides an overview of the global progress on implementing anti-money laundering and counter-terrorism financing (AML/CFT) standards for virtual assets (VAs) and virtual asset service providers (VASPs), especially the FATF’s Recommendation 15 (R.15) as well as a section on market developments and emerging risks.
It is worth noting that one of the FATF’s core tools for tackling money laundering and terrorist financing in the virtual asset space is the Travel Rule. As highlighted in FATF’s 2025 update, threats like North Korean state-sponsored hacks, $51 billion in fraud and scam activity, and cross-border laundering networks are thriving partly due to anonymity and fragmented enforcement. Transaction authorization solutions like what we provide at Notabene help VASPs securely exchange the information required by the Travel Rule, identify potentially risky counterparties, and screen wallets linked to scams or sanctions. By making Travel Rule compliance secure and frictionless, Notabene helps regulated financial institutions close off critical pathways used by illicit actors to move and hide funds—whether it’s scam-as-a-service rings, sanctioned regimes, or terror networks exploiting gaps in the system.
As a reminder, Travel Rule applies the FATF’s payment transparency requirements (Recommendation 16) to the Virtual Asset context. The Travel Rule requires VASPs and financial institutions to obtain, hold, and transmit specific originator and beneficiary information immediately and securely before or during the transfer of virtual assets.
Sunrise Issue Narrows as 99 Jurisdictions Advance Travel Rule Legislation
Jurisdictions have made continued progress on implementing the Travel Rule. In fact, 73% of respondents (85 of 117 jurisdictions, excluding those that prohibit or plan to prohibit VASPs explicitly) have passed legislation implementing the Travel Rule, up from 69% in 2024.
Although the percentage increase from 2024 is small, the number of jurisdictions that have implemented the Travel Rule grew from 65 in 2024 to 85 in 2025. Additionally, another 14 out of 117 jurisdictions said they are currently working on implementation. This would make it a total of 99 out of 117 jurisdictions that have passed or are in the process of passing travel rule legislation which is ultimately closing the gap on the sunrise issue.
What’s the Sunrise Issue?The “Sunrise Issue” refers to the period when some jurisdictions have implemented the Travel Rule while others haven’t, creating gaps in compliance. This mismatch can make cross-border transactions tricky, as VASPs in compliant countries may struggle to exchange required information with those in non-compliant ones.
However, it's worth to note that 42 of 205 total jurisdictions did not respond to the FATF survey hence indicating that global implementation is still incomplete.
Enforcement Gap: 60% of Jurisdictions with Travel Rule Laws Have Yet to Act
So what does enforcement look like? Of the 85 jurisdictions that have passed legislation on implementing the Travel Rule, only 35 have issued findings or directive or taken enforcement or other supervisory actions against VASPs focused on Travel Rule compliance. That means 50 jurisdictions (nearly 60%) have yet to take formal enforcement steps. This is likely because many jurisdictions have only recently passed Travel Rule laws and are currently focused on establishing supervision frameworks. Jurisdiction may also have ongoing enforcement cases, or working with VASPs to remediate shortcomings.
The effectiveness of the Travel Rule depends on consistent global enforcement. FATF urges jurisdictions that have introduced the Travel Rule to quickly operationalize it, including through effective supervision and enforcement in case of non-compliance. FATF even published a "Best Practice in Travel Rule Supervision" paper to help with this.
The FATF remains committed to working with jurisdictions to facilitate the implementation of Recommendation 15 and mitigate abuse of Virtual Assets and VASPs by illicit actors.
What is Recommendation 15?Recommendation 15 is FATF’s standard that requires countries to assess and address the risks of virtual assets and VASPs. It’s the foundation for regulating crypto, making sure these businesses follow anti-money laundering and counter-terrorism rules. Strong implementation of R.15 is key to keeping the financial system safer as crypto adoption grows.
Next Steps from FATF:
As part of its ongoing work, the FATF plans to:
- Release short reports on stablecoins, offshore VASPs, and DeFi between October 2025 and June 2026
- Continue helping countries with key challenges, including conducting risk assessments, determining approaches to virtual assets and VASPs, identifying who runs VASP businesses, and putting the Travel Rule into action
- Find better ways to ensure countries are consistently applying, supervising, and enforcing the Travel Rule
- Publish the next major update in 2026, which will show how countries are progressing on Recommendation 15 and responding to new risks in the virtual asset space. This update will also include a revised public table showing which jurisdictions have large VASP activity.
A Closer Look: Which Countries Are Actually Implementing FATF’s Crypto Standards?
In March 2024, the FATF published a table (known as Annex A) showing how FATF members and 20 key countries with materially important VASP activity were doing in applying its standards. The 2025 update adds 9 more non-FATF countries that now meet the criteria. Together, these jurisdictions make up about 98% of the global virtual asset market, making it especially important that they fully follow the FATF rules.
Materially important jurisdictions are based on:
- Trading volume (over 0.25% of global trading); and/or
- Jurisdictions with a large virtual asset user base (top 30 jurisdictions with the highest VA ownership and to VA adoption rate).
In total, 9 new non-FATF countries were added: 4 qualified because of high trading volume, and 5 because they have a large number of virtual asset users.
These insights come from countries' responses to FATF’s 2025 self-reported survey. So, what are the key takeaways?
85% of materially relevant jurisdictions have Travel Rule regulation in place or in progress. Specifically, from the 67 jurisdictions mentioned in this year's report, a total of 57 have Travel Rule Regulation in place or in progress.
Of the 9 newly added material jurisdictions:
- 3 of them (Bahrain, Czech Republic, El Salvador) have Travel Rule already in place
- 4 of them (Cambodia, Kenya, Pakistan, Saint Vincent and the Grenadines are in process of having TR in place
- 2 of them (Ethiopia and Morocco) explicitly prohibited VAs/VASPs, aligning with similar restrictions reported last year in China, Egypt, and Saudi Arabia.
Additionally, around 94% of the jurisdictions conducted a risk assessment covering VAs and VASPs, while 80% enacted legislation mandating VASPs' registration or licensing and compliance with AML/CTF requirements. Similarly, 79% conducted supervisory inspections on VASPs.
What’s next?
FATF encourages governments to carefully evaluate how virtual assets (VAs) and virtual asset service providers (VASPs) might be used for money laundering or terrorist financing. These assessments can help inform whether to allow or restrict VAs and VASPs, and highlight the importance of clear policies and robust oversight. It’s also crucial to have proper licensing in place, especially for offshore VASPs and those managing stablecoins. As the landscape evolves, authorities are urged to keep pace with new risks—like DeFi platforms, unhosted wallets, and emerging scam tactics such as AI-driven schemes, pig butchering, and address poisoning—by staying informed and proactive.
For more context on FATF’s recent updates to Recommendation 16, check out this related article that breaks down the key changes and what they mean for compliance teams navigating the evolving regulatory landscape.
Read the full FATF Targeted Update here
*Methodology: FATF and the Global Network consist of 205 jurisdictions in total. 163 jurisdictions responded to the 2025 survey. For jurisdictions that did not respond to the FATF’s survey, the FATF has assumed that they have not yet implemented the requirements. For Figure 1.1 on Travel Rule implementation, the data focuses on the 117 jurisdictions that have neither prohibited VASPs nor announced plans to do so.
