The Financial Action Task Force urged countries to speed up enforcement of crypto anti-money laundering standards, saying illicit finance exploiting stablecoins is rising.

Cointelegraph reported on Wednesday that FATF said in its latest annual review report that most on-chain criminal activity identified was linked to dollar-pegged cryptocurrencies.

FATF warned that criminal networks are increasingly using stablecoins to avoid asset freezes and seizures. Some criminal networks have also moved to develop their own stablecoins designed to withstand freezes and asset seizures. FATF stressed that illicit actors are exploiting regulatory gaps and that implementation of crypto anti-money laundering standards should move faster.

The report is an annual review of how countries are implementing crypto anti-money laundering standards. FATF said 83 percent of the jurisdictions surveyed have incorporated the travel rule into law, up from 73 percent a year earlier. It added that many jurisdictions are failing to connect these legal frameworks to actual supervision and enforcement.

The travel rule requires financial institutions and digital asset service providers to share sender and recipient information for cross-border transfers and cryptocurrency transactions above a certain threshold. The threshold is $1,000 or 1,000 euros.

FATF said oversight of offshore-based crypto service providers and risk assessments for decentralised finance remain challenges. It warned in particular that DeFi could grow into a regulatory blind spot.