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    Luxembourg Flags Cryptocurrency Service Providers as High-Risk Entities

    wsjcryptoBy Nessun commento2 Mins Read

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    Luxembourg categorized virtual asset service providers (VASPs) as high-risk entities for money laundering in its 2025 National Risk Assessment (NRA), underscoring worries about the crypto sector’s vulnerability to financial crime.

    According to the report, the inherent threat level of VASPs is labeled “High,” influenced by elements such as transaction volume, client outreach, distribution channels, legal frameworks, and the global nature of operations.

    The NRA recognized VASPs as an emerging danger in its 2020 report following “a comprehensive evaluation of money laundering inherent risks stemming from virtual assets.” This was succeeded by a 2022 NRA document labeling “the hazards linked to crypto assets and virtual currencies as extremely high,” since they are, among other reasons, internet-dependent and cross-border.

    Related: Operators of Blender and Sinbad confront US money laundering accusations

    EU’s evolving cryptocurrency governance

    The European Union, of which Luxembourg is a founding nation, has been striving to govern the cryptocurrency arena. A central aspect of this initiative is the Markets in Crypto-Assets (MiCA) framework, aimed at standardizing crypto regulation across all 27 EU member countries.

    Since January, crypto asset service providers have begun to obtain licenses to function legally within the EU. In May, the cryptocurrency exchange Kraken initiated regulated derivatives trading, while its competitor Crypto.com obtained a license permitting it to conduct similar operations.

    MiCA furthermore establishes new criteria for stablecoins. The market leader in stablecoins behind USDt (USDT), Tether, declines to adhere to the new regulations and was delisted on Crypto.com, Coinbase, and leading exchange Binance on their EU platforms.

    Related: French authorities investigate Binance for alleged money laundering and fraud: Report

    Money laundering via cryptocurrency

    As the significance of cryptocurrencies in the wider financial ecosystem grows, their appeal for money laundering also rises. Earlier this month, Hong Kong police apprehended 12 individuals implicated in a cross-border money laundering operation that utilized crypto and over 500 fraudulent bank accounts to launder 118 million Hong Kong dollars ($15 million).

    Crypto value received by illicit addresses annually. Source: Chainalysis

    According to reports this month, European law enforcement apprehended 17 individuals linked to a “mafia crypto bank” for allegedly laundering over 21 million euros ($23.5 million) in crypto for criminal entities based in the Middle East and China. Consequently, items worth 4.5 million euros ($5 million) were confiscated, including cash, crypto, 18 vehicles, four shotguns, and multiple electronic devices.

    Magazine: Chinese Tether laundering operation, Bhutan sees a surge in Bitcoin holdings: Asia Express