The United Nations agency urges all member nations to immediately enforce the Travel Rule to safeguard against “loopholes” currently unaddressed by regulations.

The Financial Action Task Force has reiterated its appeal to countries worldwide to enforce the “Travel Rule,” as a measure against potential money laundering and terrorist financing activities facilitated by cryptocurrencies.

The United Nations agency, which is dedicated to formulating strategies to combat money laundering and terrorist financing, clarified on June 23 that numerous member states have been remiss in implementing the rule.

The appeal comes in the wake of a series of meetings at the FATF headquarters in Paris.

According to the FATF, the majority of survey participants reported they had not taken any measures to enforce the rule:

“Over half of the survey participants have not undertaken any actions toward enforcing the Travel Rule, a key requirement by the FATF to prevent funds from being transferred to sanctioned individuals or entities.”

The FATF pressed countries to apply Anti-Money Laundering and Counter-Terrorism Financing protocols to cryptocurrency-related activities “without delay” to halt “criminals” from taking advantage of “significant loopholes” currently outside the scope of regulations.

A March 2022 survey by FATF revealed that only 29 out of the 98 jurisdictions surveyed at that time met the requirements associated with the travel rules, and only a small fraction of these jurisdictions had commenced enforcement.

The FATF travel rule was conceived to address the anonymity of unlawful cryptocurrency transactions. It was first introduced in June 2019 and subsequently updated in June 2022. A further update to the rules was endorsed by FATF members during the meetings.

FATF announced that it would release a report on June 27, urging member nations to implement its recommendations to close the loopholes it identifies as vulnerable to criminal exploitation.

The report will include a discussion on North Korea’s alleged illicit virtual asset activities, where stolen funds are reportedly funneled into its Weapons of Mass Destruction program, according to the FATF.

Other “emerging risks,” such as illicit activities linked to stablecoins, decentralized finance, non-fungible tokens, and peer-to-peer transactions will also be discussed in the report, it added.