At the meeting, among other things, FATF:

• Finalised a targeted update on the implementation of the FATF standards to prevent the misuse of virtual assets and Virtual Asset Service Providers (VASPs) for money laundering, and the financing of terrorism and proliferation. FATF is due to publish a report at the end of June 2022, focussing on the implementation of FATF's travel rule, which requires VASPs to collect or send information on the identities of the originator and beneficiary with virtual asset transfers. The report will also provide an update on emerging risks and market developments that FATF continues to monitor, such as DeFi, NFTs and unhosted wallets.
• Discussed progress in developing guidance that aims to help countries implement the revised requirements of FATF relating to implementing the FATF standard on beneficial ownership information for legal persons. FATF intends to finalise the guidance in October 2022. 
• Finalised a report sharing good practices and recommendations for combating money laundering and terrorist financing by sharing information while adhering to data protection and privacy. This is the first report that provides tangible examples of information sharing initiatives with analysis of the data protection implications. It highlights the importance of collaboration and co-operation between anti-money laundering and data protection authorities and is due to be published in July 2022.

The report found that 58 out of 128 reporting jurisdictions have implemented the revised FATF standards, with 52 of these regulating VASPs and six prohibiting the operation of VASPs. The remaining 70 jurisidictions have not currently implemented the revised Standards in their national law, which means that there is not a global regime to prevent the misuse of virtual assets and VASPs for money laundering or terrorist financing. 

There has been progress in the development of technological solutions to enable the implementation of the ‘travel rule’ for VASPs. However, the lack of implementation of travel rule requirements by jurisdictions is acting as disincentive to the private sector, particularly VASPs, to invest in the necessary technology solutions and compliance infrastructure to comply with the ‘travel rule’.

The report finds there has been strong and rapid growth in the virtual asset sector since the FATF revised its Standards. The FATF has not seen any evidence that the revisions have stifled innovation in the sector, which suggests that greater regulatory certainty and strong AML/CFT controls at the international level can act as a facilitator to business development and public adoption.

However, FATF has observed that ML/TF trends for virtual assets have continued, in particular there has been a large increase in the use of virtual assets to collect ransomware payments and to commit and launder the proceeds of fraud.

The report concludes that is it not necessary to amend the revised FATF Standards at this time, except for technical amendments to apply the FATF's recent changes on proliferation financing to virtual assets and VASPs. 

Looking ahead, the FATF will focus on implementing the current FATF Standards on virtual assets and VASPs, including finalising the revised FATF Guidance on virtual assets and VASPs by November 2021, accelerate the implementation of the travel rule; and monitor the virtual asset and VASP sector.