FATF Releases Seventh Virtual Asset/VASP Implementation Update: 86% of Jurisdictions Complete Risk Assessment, But DeFi and Enforcement Gaps Remain

According to the Financial Action Task Force (FATF), as of 2026, global regulatory progress on virtual assets (VA) and virtual asset service providers (VASP) continues to advance. The FATF's latest report shows that 86% of jurisdictions have completed risk assessments for virtual assets, while 83% have implemented Travel Rule legislation. Recommendation 15 (large transactions reporting) achieved 34% "substantial compliance" globally.

However, the report identifies significant enforcement gaps, VASP identification challenges, inadequate oversight of offshore VASPs, and insufficient DeFi regulation. FATF also flagged emerging risks including stablecoin abuse, peer-to-peer non-custodial wallet transactions, offshore VASPs, DeFi protocols, and AI-assisted fraud schemes. The organization called for enhanced international cooperation, risk-based regulation, and public-private partnerships.