The Financial Action Task Force (FATF) has raised alarms about the “increasing risks” associated with the adoption of stablecoins and other cryptocurrencies.
The FATF, a global organization dedicated to combating money laundering and terrorist financing, emphasized that mass adoption of stablecoins could exacerbate these risks, especially given the “inconsistent application” of its standards across various jurisdictions.
The organization also observed a significant rise in the use of digital assets for fraudulent activities and scams, further complicating the regulatory environment for both issuers, users and companies looking to adopt these assets for clients eager to participate in crypto activities.
To address these emerging threats, the Financial Action Task Force is calling on governments worldwide to enhance their licensing and registration processes for Virtual Asset Service Providers (VASPs).
Recent reports indicate a staggering 303% increase in cryptocurrency thefts during the first quarter of the year, totaling $1.67 billion. This surge was largely driven by the high-profile hack of the Bybit exchange in February, which saw 197 hacks occur in just three months.
Due to the increased interest in stablecoins, Circle, the issuer of the second largest stablecoin in the market, USD Coin (USDC), has seen notable engagement from investors in its initial public offering (IPO).
Since June 5, Circle’s newly traded stock, under the ticker symbol CRCL, has surged significantly. It closed at $84 on its first day of trading, but by June 26, it stood at $213—a 232% increase in just three weeks.
Featured image from DALL-E, chart from TradingView.com
