Financial Action Task Force

Fraud in general, financial crime in general, in the area of money laundering, you will not hear FIC issuing statements because they are not supposed to issue any statements.

But FATF, FATF is Financial Action Task Force in France.

When it comes to money laundering, money laundering regulation, compliance issues, there are times they blacklisted it and people don't know why.

So it has implications.

So take a look at that.

FATF has done a couple of things in the past week.

I'll mention one, a report issued that highlights the growing role of underground banking, Hawala, and other similar service providers to facilitate illicit finance.

According to FATF, their summary, the report finds that criminal misuse of underground banking is a widespread global phenomenon with more than 80% of reporting jurisdictions identifying these systems among the principal professional money laundering channels or techniques.

The report also highlights the emergence of what they're calling highly sophisticated, scalable, and commercially operated cross-border professional money-loading networks and the rise of digital Hawala.

So they spoke to, close to, or reported from close to 50 jurisdictions across the FATF global network.

And that report is available on the FATF website, but they did some other things last week as well, right?

Yes, they published a new list of AML risk indicators related to the gambling sector, flagging activities such as smurfing and suspicious betting.

And finally, on money laundering news, UK Finance, the industry trade body, has published its formal response to the Financial Action Taskforce public consultation on draft guidance for its strengthened recommendation 16 payment transparency standards, which were originally agreed in June last year.

Developed alongside members of UK finances payments and financial crime teams, as well as the wider economic crime stream, the response supports the FATF's goal of enhancing the transparency and traceability of international value transfers to preserve financial integrity.

However, the representative body emphasised that the implementation of Recommendation 16 must be approached not merely as an isolated anti-crime or anti-financial crime initiative, but as a major cross-border payments transformation programme requiring coordinated alignment among global regulators, payment service providers, scheme operators and infrastructure systems.

UK Finance has urged that the final guidelines remain risk-based and operationally achievable across diverse legal and technological frameworks while still delivering effective economic crime outcomes.

Um, probably a decade, frankly, um, since we're in 2026.

The very first of the global rules to be harmonized was the Financial Action Task Force, um, and Recommendation 16, which is that the travel rule, um, should, uh, one, apply, and two, that entities and digital wallet providers and others should, uh, adhere to the travel rule across all crypto assets.

And so rather than contribute to this arbitrage and race to the bottom where, you know, sure, illicit activity will live in any money network of any kind anywhere- The crypto market has responded courtesy of this FATF recommendation 16, for the better part of a decade now, has responded by saying, "How do we ensure these standards exist across the spectrum as opposed to only in certain jurisdictions?" I think that's an incredibly powerful driver of, you know, number one, giving bad actors few places to hide in these networks, and number two, ensuring that the inclusive nature of this technology can reach as many people as possible without penalizing them with the insidious type of geographic de-risking we see all too often and, and is all too entrenched in the traditional financial system.

Even well-intentioned banks are telling people south of the equator, "Sorry, I cannot give you the bottom rung of the global economy and financial system, uh, because you're in a high-risk jurisdiction." What blockchains allow us to do, and what stablecoins allow us to do, and Circle has proven this, is to invert that pyramid and say, "I can give you access to the global financial system even in a high-risk jurisdiction, because I could at least attribute you to being a good actor." Uh, and so one person's anonymity is another person's right to privacy.

Uh, but what these networks allow us to do is to ensure that a bad actor or a bad activity is tracked, traced, and increasingly retrieved, uh, where you have this consolidation.

I like to call it the digital fire brigade.

This consolidation of good actors are looking at the entirety of the crypto value chain, and really trying to figure out how the technologies move as fast as the bad actors are moving.

And that piece is the true national security imperative of ensuring that these modern global payment systems follow US and Western values, and that the broader part of the financial crime compliance, uh, requirements in the world, FATF sanctions obligations and many others, don't look at crypto as, uh...

because it's very destructive of your national sovereignty when you make your monetary policy, your interest rates, when you can't control the flows in and out of the country, or they've tightened their exchange controls.

And I think we might be on the verge of going back into, do you remember the grey list? Where the Financial Action Task Force, they said, hey, you're not watching your flows.

You've got a lot of criminality, but also just, you know, where are your regulations? So we did have some new laws.

We got off the grey list.