FATF Says Crypto Misuse Fuels Illicit Finance, Pushes Tougher Global Rules
On Feb. 21, 2026 the Financial Action Task Force adopted fresh digital-asset risk assessments, maintained Iran on its blacklist and intensified scrutiny of stablecoins and offshore service providers, saying misuse of crypto is increasingly fuelling illicit finance. The updated assessments formalize the FATF’s concerns about cross-border flows, opaque provider structures and risks tied to certain stablecoin arrangements.
The decision matters because it raises the bar for AML/CFT compliance worldwide: regulators can expect calls for tougher licences, enhanced due diligence and closer monitoring of on- and off-ramps. Expect higher compliance costs, potential market fragmentation as jurisdictions respond differently, and a greater likelihood of enforcement against non-compliant firms. Market participants should prepare for clearer guidance and faster implementation of KYC, custody and transaction-monitoring measures.