FATF Report Highlights Regulatory Gaps in Offshore Crypto Services
- Only 46% of jurisdictions regulate Virtual Asset Service Providers (VASPs) based on their activities.
- Offshore VASPs are frequently exploited for fraud, money laundering, and terrorism financing.
- The FATF calls for enhanced control and international cooperation to mitigate risks from offshore crypto services.
- Criminals utilize methods like routing transactions through intermediary wallets to mask illegal fund movements.
- Elisa de Anda Madrazo, FATF President, notes that these regulatory gaps create “blind spots” in financial supervision.
The FATF emphasizes the need for jurisdictions to adopt an activity-based regulatory framework for VASPs to address significant risks associated with offshore operations. Strengthening oversight can help safeguard against illicit activities within the cryptocurrency ecosystem.
With only 46% of jurisdictions regulating VASPs based on their activities, urgent action is needed to close these regulatory gaps and enhance international cooperation against financial crimes.(Source)
