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ARTICLE · 03 MARCH 2026

The FATF's Targeted Report On Stablecoins And Unhosted Wallets

Walkers
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The Financial Action Task Force has released a comprehensive report examining how criminals exploit stablecoins through peer-to-peer transactions and unhosted wallets for money laundering and terrorist financing. This analysis explores the regulatory landscape across multiple offshore jurisdictions and outlines practical compliance measures that stablecoin issuers and digital asset businesses should implement to combat financial crime.

GlobalTechnology
Lucy Frew
Lucy Frew
Leonie Tear
Leonie Tear
Niall Esler
Niall Esler
Chris Hutley-Hurst
Chris Hutley-Hurst
Dilmun Leach
Dilmun Leach
Gemma Palmer
Gemma Palmer
Iona Wright
Iona Wright
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Key takeaways

  • A new report from the Financial Action Task Force highlights illicit finance risks linked to criminals' misuse of stablecoins, particularly through peer-to-peer transactions via unhosted wallets, and sets out recommended actions to strengthen controls to protect the integrity of the financial system.
  • The report highlights that the majority of ML/TF involving digital assets involves stablecoins, being the most popular digital asset for illicit transactions, particularly in the secondary market. 
  • This Report provides recommended actions that stablecoin issuers should take into account when building out compliance programs to mitigate ML/TF/PF risks connected with the stablecoin ecosystem and sets out typologies of stablecoin misuse.

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