97% of African countries struggle with crypto compliance: FATF
FATF’s latest review also reveals that 75% of jurisdictions globally fall short of crypto compliance.
The Financial Action Task Force (FATF) has released its fifth targeted review on the implementation of crypto regulations globally, revealing that while progress has been made, overall compliance remains behind traditional financial sectors.
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Quick facts
- 75% of assessed jurisdictions are still partially or non-compliant with Recommendation 15 (R 15) on virtual assets.
- Nearly one-third of surveyed jurisdictions have not passed Travel Rule legislation.
- Terrorist groups, particularly in Syria and Asia, are increasingly using virtual assets, often favoring stablecoins.
What they're saying
- The FATF report stated:
“A continued lack of implementation of the relevant FATF Standards globally means that VAs and VASPs remain vulnerable to misuse and overall implementation of the Standards remains behind that of other financial sectors.”
Zoom in
The report also provides insights into the implementation of R 15 across different FATF-Style Regional Bodies (FSRBs).
For Africa, the report shows that approximately 97% of surveyed countries are either only partially compliant or non-compliant with recommendation 15.
Why it matters
Effective regulation is crucial to mitigate money laundering and terrorist financing risks associated with cryptocurrencies.
- For African nations, compliance with FATF standards can improve their standing in the global financial system.
- Of note, roughly 57% of all FATF grey-listed countries are African.
Zoom out
As crypto adoption continues to grow in Africa, regulators face increasing pressure to implement effective oversight.
- At present, South Africa is the only African economy with materially important crypto activity to have a relatively advanced digital asset regulatory regime.
- The country initially declared crypto as a financial product in 2022.
- As of June 30, 2024, South Africa has granted crypto 138 licenses.
- While Nigeria published a crypto rulebook in 2022, it still doesn’t have a clear licensing regime in place. More recently, it’s taken the regulation-by-enforcement approach, with the country currently in a legal battle with crypto exchange Binance.
