FATF Report Finds "Virtual Assets Increasingly Used By Terrorist Groups"
FATF report finds 'virtual assets' increasingly used by terrorist groups, despite 75% of jurisdictions still lacking risk assessments.
A new FATF report on the the implementation of FATF standards on 'Virtual Assets' and 'Virtual Asset Service Providers' finds that "Virtual Assets are increasingly used by terrorist groups".
The statement is provided without footnote or citation, noting results from FATF Mutual Evaluation Reports and a 2024 Survey in which "responses were self-reported and not verified". According to the report, participants noted an increase in the use of Virtual Assets by terrorist groups in "in Syria and ISIL in Asia".
The statement is contradicted in the report itself, finding that "DPRK-stolen funds fell from USD 1.7 billion in 2022 to USD 1.0 billion in 2023", merely making note of an increase in the use of Tether's USDT for terrorist financing campaigns.
The statement additionally stands in stark contrast to Chainalysis' 2024 Crypto Crime Report, which found a decrease in illicit activity in overall cryptocurrency transaction volume from 0.42% in 2022 to 0.34% in 2023 . The report recognizes that "the majority of [terrorist financing] continued to occur in cash and other traditional methods".
Notably, the report finds that 75% of jurisdictions "have not conducted adequate risk assessments" in accordance with Recommendation 15, which governs the mitigation of risks associated with 'Virtual Assets'.
The report finds that "data gaps remain as a main challenge", stating that "the majority of respondents [...] have not yet evaluated or started evaluating the specific risks related to self-hosted wallets or P2P transactions".
FATF yet recommends that "all jurisdictions act rapidly to fully implement the FATF's requirements on VAs and VASPs" to address the "emerging and increasing risks" in Stablecoins, DeFi, and "unhosted wallets including P2P transactions".
It particularly urges the private sector to review and improve their implementation of the Travel Rule, which requires VASPs and financial institutions to "obtain, hold, and transmit specific originator and beneficiary information immediately and securely when transferring VAs".
Independent journalism does not finance itself. If you enjoyed this article, please consider donating to our Geyser Fund.
