FATF warns offshore crypto firms create money laundering blind spots

The Financial Action Task Force (FATF) has warned that offshore virtual asset service providers (oVASPs) create risks related to money laundering, sanctions evasion, and other illicit financial activities. In a report on understanding and mitigating the risks of oVASPs, the FATF noted that some offshore companies exploit gaps and differences in regulatory and supervisory coverage, making it difficult for authorities to monitor and enforce anti-money laundering and counter-terrorism financing rules. The FATF recommended that national governments require oVASPs to register or obtain a license if they provide services to domestic users and called for strengthening cross-border cooperation between regulators and law enforcement agencies.