Crypto glossary
FATF (Financial Action Task Force)
The FATF is the intergovernmental body that sets global standards against money laundering and terrorist financing, including rules for crypto providers.
The Financial Action Task Force was set up in 1989 by the G7 and is based in Paris. Its recommendations are not laws, but member countries are evaluated on how well they apply them, and jurisdictions with serious gaps can be placed on its grey or black lists, which raises costs for their banks and businesses.
In 2019 the FATF extended its standards to virtual assets and virtual asset service providers (VASPs). Countries are expected to license or register exchanges, wallet providers and similar firms, apply customer due diligence and enforce the Travel Rule on transfers. It publishes regular reviews of how far each country has implemented these crypto rules, and national laws such as the EU anti-money-laundering package build on them.
Implementation remains uneven, and gaps in some jurisdictions allow illicit flows to move through less regulated platforms. For users, FATF standards explain why exchanges ask for identity documents and information about the source of funds.
Example
When a country is added to the FATF grey list, exchanges and banks elsewhere often apply extra checks to transfers involving that country, which slows deposits and withdrawals.
Related terms
Latest articles on FATF
- FATF Launches Targeted Review of Crypto AML Gaps
- FATF Warns Crypto Is Falling Behind as AI Crime Surges
- FATF Flags Lingering Centralization in DeFi, Urging Countries to Enforce Rules
- FATF Warns That P2P Stablecoin Transfers Through Self-Custody Wallets Can Enable Sanctions Evasion
- FATF Asks Countries to Implement the Crypto Travel Rule
