# Global Cooperation Essential for Crypto Regulation to Combat Organized Crime

- Link: https://www.thailand-business-news.com/crime/222011-global-cooperation-essential-for-crypto-regulation-to-combat-organized-crime
- Published: 2025-06-11T03:39:00+07:00
- Author: Boris Sullivan

Global coordination in cryptocurrency regulation is urgently needed to tackle illicit
financial flows linked to organized crime.

This requires a unified framework that ensures transparency, enforces compliance,
and promotes accountability across jurisdictions. By fostering international collaboration,
governments can close regulatory gaps, deter criminal activities, and build trust
in the digital asset ecosystem while supporting innovation and economic growth.

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According to the **2025 Crypto Crime Report**, illicit crypto transactions in 2023
amounted to **$46.1 billion**, with expectations that the 2024 figure will exceed
that. A significant portion of this activity is attributed to **Huione**, a financial
conglomerate based in Cambodia, which operates as a hub for **cyber scams, human
trafficking, and money laundering**.

The **Financial Action Task Force (FATF) Travel Rule**, introduced in 2019, requires**
Virtual Asset Service Providers (VASPs)** to collect and transmit transaction details
to enhance transparency. However, adoption has been **insufficient**, with **75%
of jurisdictions** either partially or non-compliant. The article argues that **
organized crime groups** like Huione will continue exploiting regulatory gaps unless
countries **coordinate efforts** to enforce stricter regulations.

The **U.S. Department of the Treasury** recently restricted Huione’s access to the**
U.S. financial system**, but the article warns that **many loopholes remain**, allowing
illicit actors to continue operations. It stresses that **closing these loopholes**
requires **global cooperation** rather than isolated national actions.

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This requires collaborative efforts among governments, financial institutions, and
international organizations to establish standardized frameworks. Such frameworks
should aim to enhance transparency, ensure compliance, and mitigate risks while 
fostering innovation within the cryptocurrency ecosystem.

### How effective are current regulations like the FATF Travel Rule?

The **FATF Travel Rule**, introduced in 2019, aims to enhance transparency in virtual
asset transactions by requiring **Virtual Asset Service Providers (VASPs)** to collect
and share sender and receiver details. However, its effectiveness has been **limited**
due to **slow global adoption** and **regulatory inconsistencies**.

According to the **2023 FATF update**, only **58 jurisdictions** had passed legislation
to implement the Travel Rule, up from **29 in 2022**. Despite this progress, **many
countries remain non-compliant**, creating loopholes that **organized crime groups**
exploit. The **Sunrise Issue**, where the rule is not uniformly enforced across 
jurisdictions, makes compliance difficult for VASPs.

While **technological solutions** exist to facilitate compliance, **interoperability
issues** between different systems hinder full implementation. The FATF continues
to urge countries to **accelerate enforcement** to mitigate financial crime risks.

### Exploited vulnerabilities by organized crime groups

Compliance gaps create **loopholes** that organized crime groups exploit, weakening
financial security. When regulations like the **FATF Travel Rule** are **not uniformly
enforced**, criminals can move illicit funds across jurisdictions with minimal oversight.
This is known as the **Sunrise Issue**, where inconsistent adoption allows bad actors
to operate in less-regulated regions.

According to financial crime experts, **money laundering networks** increasingly
use **cryptocurrencies** and **shell companies** to bypass weak compliance measures.
In 2023, an estimated **5% of global GDP** was linked to laundered money. Criminal
enterprises also **diversify their operations**, engaging in cyber fraud, human 
trafficking, and illegal trade. Without **strong compliance frameworks**, financial
institutions struggle to detect and prevent these activities.

Regulatory bodies emphasize that **enhanced data-sharing** and **automation** can
improve compliance. However, many firms lack the resources to implement **advanced
fraud detection systems**, leaving them vulnerable. Strengthening compliance across
borders is crucial to **disrupting organized crime networks** and **safeguarding
financial systems**.