FATF Flags Stablecoins, DeFi as Crypto Regulation Tightens

- FATF highlights risks in stablecoins and DeFi, signaling tougher compliance measures. - Global adoption of the "Travel Rule" reaches 73% of jurisdictions. On June 26, the Financial Action Task Force (FATF) released its 2025 annual report, which intensifies scrutiny of stablecoins like Tether (USDT) and decentralized finance (DeFi) platforms. On July 1, 2025, Cointelegraph reported that this marks a broader effort to combat illicit activities in the cryptocurrency sector. The report showcases progress in the global adoption of the FATF’s Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) standards. For example, as of 2025, 73% of eligible jurisdictions have enacted laws aligned with the FATF’s "Travel Rule." This rule requires cryptocurrency service providers to collect and transmit user data, thereby enhancing transaction transparency. For the second consecutive year, the FATF flagged Tether (USDT) for its increasing association with unlawful financial activity. In addition, decentralized finance platforms face heightened examination because regulatory frameworks struggle to adapt to their unique operational models. The FATF plans to issue new guidance on these areas, and these forthcoming compliance measures could reshape the cryptocurrency landscape globally. The report also reiterates the consequences of non-compliance, such as placement on the FATF's "gray list," which carries significant economic and reputational risks. The FATF's regulatory framework is embedded within UN standards and remains a cornerstone of international financial governance. As of 15:08 UTC on July 1, CoinMarketCap data showed Tether (USDT) trading at $1 with its 24-hour volume up by 0.037%, while TRON (TRX) was valued at $0.278, showing a 0.32% volume shift.