2026 FATF Targeted Update Summarised: Part 1

The Financial Action Task Force (FATF) has released its 2026 Targeted Update on Implementation of the FATF Standards on Virtual Assets and Virtual Asset Service Providers, providing an overview of global progress in implementing Recommendation 15 (R.15) and the Travel Rule.

See the FATF's key findings from 2026 summarised and compared with 2025’s report. Access updates on Recommendation 15’s global progress, the implementation and enforcement of the Travel Rule, developments in licensing and supervision, and the emerging risks shaping the next phase of virtual asset regulation.

Access 2026 FATF Targeted Update Summarised: Part 2 for report's key findings surrounding AI in virtual asset crimes, the challenges and risks stablecoins, self-hosted wallets and DeFi pose. 

TL;DR: 2025 vs 2026 

The FATF's 2026 update shows continued progress in implementing AML/CFT standards for virtual assets and virtual asset service providers (VASPs), but highlights that many jurisdictions are still struggling to translate legislation into effective supervision and enforcement.

As of April 2026, 34% of assessed jurisdictions were rated largely compliant with Recommendation 15, up from 29% in 2025, while 43% remain only partially compliant. Only one jurisdiction continues to be fully compliant. Although more jurisdictions have introduced licensing frameworks, many continue to face challenges identifying entities conducting VASP activities and operationalising supervision.

Progress in Travel Rule implementation has also accelerated. 83% of responding jurisdictions have now passed legislation implementing the Travel Rule, compared to 73% in 2025. However, implementation remains uneven. Of the jurisdictions that have adopted Travel Rule legislation, nearly 50% have not yet taken supervisory or enforcement action related to Travel Rule compliance.

The report also identifies a significant evolution in the virtual asset threat landscape. Organised crime groups are increasingly industrialising crypto-enabled fraud, while stablecoins, offshore VASPs, self-hosted wallets, over-the-counter brokers, cross-chain tools, and DeFi arrangements continue to present significant money laundering, terrorist financing, and proliferation financing risks.

Looking ahead, the FATF emphasises that jurisdictions should prioritise practical supervision, risk-based enforcement, stronger international cooperation, and improved public-private collaboration to ensure Recommendation 15 is implemented effectively.

Background on the Report

The 2026 Targeted Update on Implementation of the FATF Standards on Virtual Assets and VASPs is the FATF's seventh annual assessment of global implementation of Recommendation 15 following the extension of the FATF Standards to virtual assets in 2018.

This year's report draws on several sources, including:

• A 2026 survey of Recommendation 15 implementation across 147 jurisdictions, comprising 38 FATF members and 109 FATF-Style Regional Body (FSRB) members.
• Results from 149 published FATF Mutual Evaluation Reports and Follow-up Reports assessing compliance with Recommendation 15 as of April 2026.
• Discussions held during Virtual Assets Contact Group (VACG) meetings in September 2025 and May 2026, together with the VACG Symposium held in December 2025.
• Findings relating to implementation of the Travel Rule, licensing and supervision of VASPs, emerging risks, and public and private sector responses.

As in previous years, survey responses were self-reported and have not been independently verified. For the purposes of the analysis, the FATF assumes that jurisdictions which did not respond to the survey have not made further progress in implementing Recommendation 15 or the Travel Rule.

Jurisdictions' Implementation of FATF Standards on VAs/VASPs (R.15)

149 jurisdictions have been assessed for compliance with Recommendation 15 and its Interpretive Note.

Global implementation continues to improve, albeit gradually. The proportion of jurisdictions rated largely compliant increased from 29% (40 of 138 jurisdictions) in 2025 to 34% (51 of 149 jurisdictions) in 2026. Meanwhile, jurisdictions rated partially compliant declined from 50% to 43% in 2026. 

Despite this progress, 22% of assessed jurisdictions remain non-compliant, virtually unchanged from 2025, with only one jurisdiction continuing to be fully compliant with Recommendation 15. The FATF also notes that implementation varies considerably across regions, with lower-capacity jurisdictions continuing to face greater challenges meeting the requirements.

While assessment results indicate overall improvement, the FATF identifies several persistent implementation gaps.

Many jurisdictions have made progress in conducting virtual asset risk assessments and establishing regulatory frameworks, yet continue to struggle to translate those assessments into practical supervisory and enforcement measures. Similarly, although more jurisdictions have introduced licensing and registration frameworks for VASPs, identifying individuals and entities conducting VASP activities remains a significant challenge. The implementation and enforcement of the Travel Rule also continues to lag behind legislative adoption.

Progress in Virtual Asset Risk Assessments

One of the strongest areas of improvement identified in this year's report is the growing number of jurisdictions conducting national money laundering, terrorist financing, and proliferation financing (ML/TF/PF) risk assessments covering virtual assets and VASPs.

According to the 2026 survey, 86% of responding jurisdictions (124 of 145) reported conducting a virtual asset risk assessment, an increase from 76% in 2025.

However, the FATF cautions that conducting a risk assessment alone is not sufficient. Many jurisdictions continue to struggle to use these assessments effectively to implement risk-based supervisory, preventive, and enforcement measures. FATF mutual evaluations show that only a minority of jurisdictions fully satisfy the Recommendation 15 criteria relating to applying a risk-based approach, highlighting a continued gap between identifying risks and mitigating them in practice.

The FATF therefore encourages jurisdictions not only to complete virtual asset risk assessments but also to ensure they inform licensing decisions, supervisory priorities, enforcement activity, and broader national AML/CFT strategies.

Implementation of the FATF’s Travel Rule 

The FATF reports continued progress in the global implementation of the Travel Rule, although practical supervision and enforcement remain key challenges.

According to the 2026 survey, 83% of responding jurisdictions (91 of 109) have now passed legislation implementing the Travel Rule, an increase from 2025’s 73% (85 of 117). A further 11 jurisdictions reported that implementation is still underway, indicating that legislative adoption continues to expand globally.

Despite this progress, the FATF notes that passing legislation is only the first step. The effectiveness of the Travel Rule depends on jurisdictions actively supervising compliance and taking enforcement action where necessary.

Currently, 60% of jurisdictions (55 of 91) that have implemented Travel Rule legislation have not yet issued supervisory findings, directives, or enforcement actions specifically relating to Travel Rule compliance. The FATF acknowledges that many jurisdictions have only recently introduced these requirements and are still establishing supervisory frameworks. Others may be working collaboratively with VASPs to address compliance gaps or have ongoing supervisory investigations.

However, the FATF also cautions that the relatively low level of enforcement reflects broader challenges in supervising Travel Rule compliance.

The report concludes that global consistency remains essential. Because the Travel Rule only functions effectively when jurisdictions implement and enforce it in a coordinated manner, the FATF urges countries that have already introduced legislation to rapidly operationalise their supervisory regimes through risk-based oversight, effective examinations, and enforcement where non-compliance is identified.

For a comprehensive list of countries where the Travel Rule is in effect, see FATF Crypto Travel Rule Global Implementation Status 2026

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Source: 2026 Targeted Update on Implementation of the FATF Standards on Virtual Assets and Virtual Asset Service Provider