In June 2025, FATF released its sixth targeted update report on crypto asset regulation, with shocking conclusions:
Globally, only 1 jurisdiction fully complies with FATF's virtual asset regulation standards, while 20% of countries remain "non-compliant". Meanwhile, North Korean hackers have record-breakingly stolen $1.46 billion in crypto assets, stablecoins have become a new favorite for money laundering, and DeFi regulation remains shrouded in mystery...
Behind this seemingly chaotic global crypto regulation landscape, an "invisible hand" is quietly shaping the industry's rules - and that is FATF.
This article will deeply interpret FATF's latest report's six key findings, unveil the latest "black and grey list" of 27 countries, and preview important regulatory changes in 2026. Join us in understanding this global regulation "source code".
Who is FATF? Global Anti-Money Laundering "Standard Setter"
FATF (Financial Action Task Force) was established in 1989 and is the authoritative standard-setting body in global anti-money laundering and counter-terrorist financing. This intergovernmental organization, composed of 39 member countries and regional organizations, has recommendations that are considered the "golden rule" of global AML/CFT.
For the crypto industry, FATF's most critical document is Recommendation 15, which first incorporated virtual assets and VASPs into the anti-money laundering regulatory framework in 2019: VASPs must fulfill compliance obligations like customer due diligence, transaction monitoring, and suspicious transaction reporting, similar to traditional financial institutions.
FATF is not a police force, yet it made Binance pay a $4.3 billion fine; FATF has no army, yet it can isolate entire countries from the international financial system; FATF does not create laws, yet 205 jurisdictions legislate according to its standards.
Why can an international organization without law enforcement powers play such a crucial role in global crypto regulation?
The answer is simple: In this decentralized crypto world, FATF has precisely become the "centralized" global standard setter. When national regulators are still exploring how to manage this emerging industry, FATF's R.15 becomes their common "reference answer". Whether it's the US's FinCEN, EU's AMLD6, Singapore's MAS, or Hong Kong's recently passed Stablecoin Regulation, FATF standards can be seen behind them.
Interestingly, FATF transforms its originally non-binding recommendations into "hard rules" that countries must follow through its unique "soft law" mechanism - peer reviews and the "grey list" system. What does being on FATF's grey list mean? Turkey and Cambodia know well - blocked international remittances, foreign capital withdrawal, credit rating downgrades... No country wants to bear such costs.
For crypto practitioners, understanding FATF means understanding the global regulation "source code". When you know that regulatory rules in various countries are "localized" based on the same FATF standards, you can better predict regulatory trends, proactively build compliance systems, and conduct business globally.
FATF's 2025 Latest Report Interpretation: Six Key Findings
In June 2025, FATF released its sixth "Targeted Update Report on Implementation of FATF Standards for Virtual Assets and Virtual Asset Service Providers".
Through an in-depth survey of 163 jurisdictions, FATF decoded the real status of global crypto compliance through six key findings.
Finding One: Global Compliance Progress Slow but Stable
As of April 2025, among 138 jurisdictions assessed:
- Only 1 jurisdiction fully compliant: Bahamas
- 29% basically compliant, slightly up from 24% in 2024, including: US, UK, Germany, Singapore
- 49% partially compliant, including: Hong Kong, Netherlands, Turkey
- 21% non-compliant, down from 25% in 2024, including: Cambodia, Vietnam
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Cybersecurity and AML/CFT compliance must be given equal importance. Having only a compliance framework without security protection will still make one a target for hackers. Crypto enterprises need to establish a "dual insurance" protection system: On the cybersecurity level, deploy real-time monitoring and automatic attack blocking systems (such as Phalcon Security APP) to identify and intercept attacks at the first moment; on the compliance monitoring level, adopt a comprehensive KYA solution to identify wallet address tags related to North Korean hacker organizations through on-chain behavior analysis.
Looking at these six findings, a clear context emerges: Global crypto regulation is moving from a "chaotic period" to an "orderly period", but this process is far more tortuous than expected.
What is thought-provoking is the huge gap between "knowledge and action" - most countries know what to do (76% have completed risk assessments), but very few actually do it (only 29% are basically compliant). This also reflects the fundamental challenge of crypto regulation: In a field of rapid technological iteration and continuous business innovation, how to establish a regulatory system that is both effective and does not stifle innovation?
FATF's answer is: Gradual reform + global coordination. By setting unified standards but allowing localized implementation, and through soft constraints coupled with hard consequences, FATF is guiding the world towards a new regulatory landscape of "harmony in diversity". For crypto enterprises, this means compliance is no longer optional, but an entry ticket; no longer a cost center, but a source of competitive advantage.
Are Countries Also Black or Gray? 27 Countries on the List
If FATF is the "gatekeeper" of the global financial system, then the black and gray lists are the "wanted notices" in its hands. The biannual list updates always trigger chain reactions in the global financial market.
The "Three Giants" of the Black List
- North Korea: A "stubborn nail" since 2011, the mastermind behind the $1.46 billion Bybit theft
- Iran: Overlapping nuclear issues and terrorist financing risks, with its financial system completely isolated
- Myanmar: Listed after the 2022 coup, with a regulatory vacuum becoming a money laundering paradise
Any financial dealings with black-listed countries are a "high-voltage line" - light consequences include regulatory penalties, severe consequences include account freezing and settlement interruption.
Three Major Trends of the Gray List
- Africa is a severe disaster area: 12 countries on the list, with South Africa, the "light of Africa", still on the list
- Crypto hotspots in an awkward position: Nigeria (global second in P2P transaction volume) and Vietnam (top three in crypto adoption) have severely lagging regulations
- Offshore center dilemma: British Virgin Islands and Monaco are paying the price for past lenient regulations: international remittance costs increased by 30-50%, foreign investment decreased by 20-40%, credit ratings downgraded
FATF Regulatory "Spoilers" for 2026
Review of FATF's report history:
- 2019 Travel Rule Guide ???? 50+ countries legislated within 2 years
- 2020 Stablecoin Report ???? Triggered a global regulatory wave
Like a regulatory "script" - understanding the focus 6-12 months in advance allows one to gain an advantage before regulatory changes.
Three Major Reports to be Released by FATF
1. Stablecoin Special Report (Q1 2026)
Key points: Reserve transparency standards, de-pegging liability definition, cross-chain regulation
2. Offshore VASP Report (2025-2026)
Key points: "Long-arm jurisdiction" boundaries, data localization, cross-border law enforcement
3. DeFi Regulatory Guidelines (2025-2026)
Key points: Responsibility subject identification, DAO legal status, smart contract audit
An Interesting Discovery
FATF's report releases often have a "seasonal pattern" - important reports are mostly published in June and October.
Savvy compliance teams will closely monitor around these two time points, obtaining information and responding in the first instance. In the race of regulatory compliance, information is time, and time is advantage. Enterprises that can predict regulatory trends in advance will naturally gain a first-mover advantage in market competition.
The latest FATF report provides a clear trend: Global crypto regulation is moving from "wild growth" to "standardized development". Currently, only 1 jurisdiction has achieved full compliance, but this also indicates the huge development space and market opportunities in the crypto world.
