Highlights:
- The Swedish Police Authority has accused crypto exchanges of money laundering.
- According to the FIU, some unregistered crypto exchanges are operating as PMLs.
- The financial regulatory body divided the PMLs into four categories, citing some distinct characteristics.
The Swedish Police Authority, in partnership with the Financial Intelligence Unit (FIU), has launched investigations targeting unlicensed crypto exchanges in the European nation. Interestingly, the probe findings saw the regulatory agencies tag some illegal crypto operators as Professional Money Launderers (PMLs).
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For context, the FIU defined a PML as someone who engages in systemic money laundering deals for others in exchange for an agreed fee. Linking the definition to exchanges, the financial regulatory agency noted that PMLs are exchanges that offer trading services to criminals.
Per the FIU, most unlicensed exchanges are notorious for close pacts with criminally oriented platforms. Consequently, they enable systemic money laundering opportunities for the miscreants to continue perpetuating fraudulent acts.
In a released document, the FIU classified PMLs into four groups based on distinct characteristics. The four categories include the node exchange explorer, the hawala exchange provider, the asset exchange provider, and the platform exchange provider.
The Swedish Police Authority and Financial Intelligence Unit (FIU) has classified cryptocurrency exchanges as “professional money launderers (PML)
Sidoo kale list waxay ku dareen hawala system pic.twitter.com/WTk8sshkm1— Berkan (@cryptostocks247) September 24, 2024
FIU Specifies Crypto Exchanges’ Roles in Facilitating Financial Crimes
Under its assessment summary, the FIU delved into unregistered crypto exchanges, especially their roles in facilitating illegal financial acts. “The demand for crypto exchange services is very high among criminals, which suggests that the use of cryptocurrency is widespread within the criminal arena. This is particularly evident in areas such as drug crime and fraud in the cyber arena,” the FIU’s statement read in part.
In addition, the FIU envisaged unregistered crypto service operators as emerging threats, which relevant authorities must unite to tackle. Hence, the financial regulatory outlet called for greater participation from law enforcement agencies to strengthen the fight against these illegal platforms.
Swedish authorities have labelled unlicensed and illegal crypto exchanges as 'Professional Money Launderers' 🚨
These PMLs have criminal links and allow criminal individuals and networks to systematically launder money 💰🛀
They see them as a growing global threat 🗺️
— CryptoSavingExpert ® (@CryptoSavingExp) September 24, 2024
While the FIU statement might seem to target unregistered and other illegal exchanges, some parts of it acknowledged compliant trading platforms. According to the report, these exchanges have played crucial roles in curbing notorious exchanges’ criminal acts.
Advising legitimate exchanges, the FIU encouraged them to never relent in their efforts. Notably, the regulatory body urged them to monitor suspicious transactions closely and take necessary actions. The precautionary steps include halting transactions, reporting suspicious fraudulent transactions, off-boarding suspected criminals, etc.
Law Enforcement Roles in Curbing Illicit Operations
The concluding part of the report contained several enforcement plans that law enforcement agencies must implement to curb illicit transactions. Interestingly, the FIU highlighted the need to involve relevant agencies from regions outside the European Union (EU).
According to the financial crime regulatory firm, unlicenced exchange operations do not revolve around the local populace. The FIU added that these illicit firms have spread their wings across the international marketplace.
In its exact wordings, part of the released document read thus:
“Since the entire crypto arena has an international scope, it must be necessary for law enforcement agencies to conduct joint international operations, involving agencies in- and outside the EU, to share vital data and gain important synergies.”
It is left to see how events unfold. Should the parties involved play their roles as highlighted in the FIU’s document, chances abound that it would yield positive results. Meanwhile, on their part, the fraudulent trading platforms will not relent in their efforts, as most will keep evolving to circumvent enforcement efforts. Therefore, concerned entities must remain focused in their concentrated efforts.
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