The global coordination of cryptocurrency regulation is necessary to combat illicit financial flows linked to organized crime.
This requires a unified framework that guarantees transparency, applies conformity and promotes responsibility between the courts. By promoting international collaboration, governments can fill regulatory gaps, dissuade criminal activities and strengthen confidence in the digital asset ecosystem while supporting innovation and economic growth.
According to the Report on Cryptographic Crime 2025Crypto illegal transactions in 2023 are equipped with $ 46.1 billionWith expectations that the figure of 2024 will exceed this. An important part of this activity is attributed to Huionea financial conglomerate based in Cambodia, which operates like a hub for Cyber-escroqueries, deals with human beings and money laundering.
THE Travel rule of the Financial Action Working Group (FATF)Introduced in 2019, requires Virtual asset service providers (VASP) To collect and transmit transaction details to improve transparency. However, adoption was insufficientwith 75% of jurisdictions either partially or not in accordance with. The article maintains that organized crime groups As Huione will continue to exploit regulatory gaps unless countries coordinate To apply more strict regulations.
THE US Treasury Department Huione access recently American financial systemBut the article warns that many gaps remainallowing illicit actors to continue operations. It emphasizes that Fence of these gaps need global cooperation rather than isolated national actions.
This requires collaboration efforts between governments, financial institutions and international organizations to establish standardized executives. These executives should aim to improve transparency, ensure compliance and mitigate risks while promoting innovation within the cryptocurrency ecosystem.
What is the effectiveness of current regulations as the FATF travel rule?
THE Fatf travel ruleIntroduced in 2019, aims to improve the transparency of virtual asset transactions by demanding Virtual asset service providers (VASP) To collect and share the details of the sender and the receiver. However, its effectiveness was limit because of Slow global adoption And regulatory inconsistencies.
According to the FATF 2023 updateonly 58 jurisdictions had adopted legislation to implement the travel rule, from 29 in 2022. Despite this progress, Many countries remain non -compliantcreating gaps that organized crime groups exploit. THE SunriseWhere the rule is not uniformly applied through the courts, makes conformity difficult for the Vaspes.
While Technological solutions exists to facilitate compliance, Interoperability problems Between different systems hamper the complete implementation. The Gaff continues to urge countries to Accelerate the application To alleviate the risks of financial crime.
Vulnerabilities exploited by organized crime groups
Compliance gaps create apartments that the groups of organized crimes operate, weakening financial security. When regulations like the Fatf travel rule are Not evenly appliedCriminals can move illegal funds through the courts with a minimum surveillance. This is known as the Sunrisewhere incoherent adoption allows bad players to operate in less regulated regions.
According to experts in financial crime, Money laundering networks more and more use cryptocurrency And screen companies To get around low compliance measures. In 2023, an estimated 5% of world GDP was linked to bleached money. Criminal companies too diversify their operationsBuilding in cyber-fraude, trafficking in human beings and illegal trade. Without Solid compliance framesFinancial institutions find it difficult to detect and prevent these activities.
Regulation organizations point out that Improved data sharing And automation can improve compliance. However, many companies do not have the resources to implement Advanced fraud detection systemsleaving them vulnerable. Strengthening compliance through borders is crucial for Disturbing organized crime networks And protect financial systems.
