The Financial Action Task Force (FATF) said in a report released this week that global efforts to regulate virtual assets and service providers have improved but remain incomplete, with illicit use of stablecoins accelerating sharply in 2025.

The intergovernmental watchdog’s sixth targeted update on the implementation of its standards found that although 73% of jurisdictions surveyed have passed laws enforcing the so-called Travel Rule for crypto transfers, enforcement remains limited.

The report noted that out of the 85 countries with Travel Rule laws, nearly 60% have yet to issue compliance findings or directives.

The report also highlighted a record-breaking $1.46 billion virtual asset theft this year by North Korean actors from the crypto exchange Bybit.

FATF noted the hackers used social engineering and complex laundering networks involving mixers, OTC traders, and more than 125,000 Ethereum wallets. Only 3.8% of stolen funds were recovered, highlighting persistent difficulties in tracing and repatriating crypto-linked proceeds of crime.

Overall, stablecoins have become the dominant vehicle for illicit on-chain activity, driven by their low cost, fast settlement, and broad liquidity.

FATF cited private sector estimates showing over $30 trillion in stablecoin volume during the past year, alongside the growth of ‘pig butchering’ scams and professional scam networks employing AI-generated chatbots and deepfakes to defraud victims.

Despite these risks, the report found that only one jurisdiction is fully compliant with FATF Recommendation 15 on virtual asset oversight. Meanwhile, 29% of countries were rated ‘largely compliant,’ while about half remain only partially compliant and 21% are not compliant at all.

FATF urged jurisdictions to accelerate licensing and registration of virtual asset service providers, strengthen enforcement against unregistered entities, and implement measures to monitor decentralized finance (DeFi) arrangements.

The report also noted that around half of the surveyed regulators require DeFi projects with identifiable control parties to register as VASPs, but enforcement remains rare.

Looking ahead, FATF plans targeted reports on stablecoins, offshore VASPs, and DeFi over the next year. The regulatory body warned that as stablecoins approach mass adoption, uneven global regulation will heighten illicit finance risks and hamper coordinated responses.

The next comprehensive update on Recommendation 15 implementation is due in 2026.

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Crypto firm Matrixport has delivered insights into why this bull market is different from the 2021 bull run. Their analysis sheds more light on why altcoins are lagging despite the Bitcoin price rally to a new all-time high (ATH) at $111,900. 

Why This Bull Market Is Different As Altcoins Lag Behind Bitcoin Price

In an X post, Matrixport stated that many traders are missing out on the current Bitcoin price rally as traditional retail engagement indicators remain low despite the rally to a new ATH. The firm explained that this rally is happening thanks to institutional investors, with retail investors on the sidelines in this bull market. 

Matrixport noted that this explains why funding rates remain subdued, retail activity is low, and many altcoins continue to lag as the Bitcoin price rallies in this bull market. The firm also revealed that retail traders make the fundamental mistake of not anticipating market corrections, leading to them occasionally closing their positions during sharp drawdowns. 

This bull market also differs from 2021 in that retail’s share of Bitcoin ownership is no longer expanding. Crypto whales have stepped in and are absorbing most of the flagship crypto’s supply, kicking retail investors to the curb. Bloomberg analyst Eric Balchunas once noted that this could explain why the Bitcoin price has held up well during major corrections. 

According to Matrixport, understanding how corporate demand influences the Bitcoin price behavior and how long this trend is likely to last is critical as the shift in this bull market progresses. Meanwhile, the absence of retail traders in this cycle explains why funding rates and trading volumes are relatively low, with altcoins lagging. 

The firm noted that market participants are witnessing a quiet transfer of Bitcoin from early adopters and investors, miners, and exchanges to corporations like Strategy and institutional investors like BlackRock. Matrixport again asserted that the current Bitcoin price rally is driven by spot market accumulation and not derivatives activity, which could explain why altcoins are lagging behind BTC. 

What Next For BTC And Altcoins

In an X post, crypto analyst Kevin Capital stated that the next important step is for the Bitcoin price to record a weekly close above $106,800 and then follow through or consolidate next week. He remarked that BTC is really the only thing that matters and urged market participants to take their eyes off altcoins. 

If the Bitcoin price fails to accomplish that goal, the analyst stated that market participants can then turn their attention to the reverse psychology 2021 fractals. It is worth mentioning that the analyst once predicted that altcoins led by Dogecoin will still have their run once BTC’s dominance cools off in the summer. 

At the time of writing, the Bitcoin price is trading at around $108,258, down almost 2% in the last 24 hours, according to data from CoinMarketCap.

Featured image from Pixabay, chart from Tradingview.com

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