FATF Report Says 83% of Jurisdictions Have Adopted the Travel Rule

FATF said 83% of surveyed jurisdictions have incorporated the Travel Rule into national legislation, up from 73% in 2025, but many regulators have been slow to turn those laws into enforcement action. According to ChainCatcher, the report also identified DeFi, offshore virtual asset service providers, and unhosted wallets as major regulatory gaps that continue to hinder money-laundering tracking. The report said stablecoins are now used more often than Bitcoin in illicit on-chain activity, especially for cross-border terror financing and online fraud. It also warned that criminals are increasingly abusing AI to generate fake KYC documents, automate phishing smart contracts, and conduct high-frequency laundering through DEXs, making investigations more difficult. FATF said the digital asset compliance challenge in the second half of 2026 will require faster cross-border coordination among governments and private-sector firms, including compliant VASPs and blockchain analytics companies.