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ARTICLE · 18 MARCH 2026

Navigating The Regulatory Perimeter: FATF's 2026 Framework For Mitigating Offshore Virtual Asset Service Provider Risks

GTG Legal
GTG Legal
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GTG Legal

GTG Legal

Since its founding in 1997, GTG has been at the forefront of Malta’s legal profession, blending...

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The architecture of global financial regulation is undergoing a structural transformation, driven by the rapid proliferation of digital assets their inherently borderless nature.

MaltaTechnology
Josef Cachia Fenech Gonzi
Josef Cachia Fenech Gonzi

Navigating the Regulatory Perimeter

The architecture of global financial regulation is undergoing a structural transformation, driven by the rapid proliferation of digital assets their inherently borderless nature. In March 2026, the FATF released a landmark analytical report titled "Understanding and Mitigating the Risks of Off-shore Virtual Asset Service Providers". While the industry grapples with the complexities of unhosted wallets and decentralized finance, the structural conduits enabling a significant portion of illicit cross-border flows remain unregulated or under-regulated offshore virtual asset service providers (oVASPs).

The regulatory challenges surrounding oVASPs stem from a foundational implementation gap across the global network. In 2019, the FATF expanded Recommendation 15 (R.15) to cover Virtual Assets (VAs) and Virtual Asset Service Providers (VASPs), mandating that jurisdictions identify, assess, and mitigate money laundering, terrorist financing, and

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