The Financial Action Task Force (FATF) has expressed concerns that not many nations have implemented the rules it had laid down to regulate the virtual digital assets sector. In a report issued by the FATF, the delay in deploying and adoption of these crypto-related rules is leaving room for criminal activities to take shape. The organisation has analysed 12 months of data to prepare a list of nations, detailing the rules adopted by each nation.

“In February 2023, the FATF Plenary agreed on a roadmap to strengthen implementation of the FATF Standards on virtual assets and virtual asset service providers (VASPs). Many countries have yet to fully implement the FATF’s requirements on virtual assets and virtual asset service providers to prevent their misuse for illicit finance,” the organisation said in an official post.

The Paris-based global financial watchdog has been trying to resolve issues tied to the misuse of crypto assets by criminals for money laundering or terror financing. Back in November 2022, the FATF had unofficially mandated countries to abide by its anti-money laundering (AML) regulations to avoid being ‘grey listed’.

Among other rules, the FATF has directed all countries to only allow licenced firms to deal with crypto assets. The FATF have also instructed nations to collect details about senders and receivers of crypto assets, especially about suspicious transactions. In the list that the FATF has compiled, it has marked the nations that have or haven’t fulfilled certain criteria laid out by the FATF around crypto activities.

These criteria includes conducting risk assessment, enacting licencing regime, and conducting supervisory inspection of VASPs among others.

“Virtual assets are inherently international and borderless, meaning a failure to regulate VASPs in one jurisdiction can have serious global implications. This is particularly concerning,” the organisation said. “The purposes of this table are to enable the FATF network to encourage jurisdictions with materially important VASP activity to fully implement Recommendation 15 in a timely manner.”

India has seemingly deployed all of the rules laid out by the FATF. Some nations like Australia, Finland, Greece, Malaysia, and Portugal on the other hand, are still in the process of deploying FATF rules.

Ashish Singhal, the Co-founder at India’s CoinSwitch crypto exchange has reacted to FATF’s concerns.

“We commend India’s proactive approach in conducting a risk assessment of VASPs and implementing the Travel Rule. India’s Mutual Evaluation was carried out last year and a possible plenary discussion is slated for June this year,” Singhal wrote in a LinkedIn post.