Sweden classifies some crypto exchanges as ‘professional money launderers’
Sweden has classified a number of crypto exchanges and crypto-related service providers as “professional money launderers,” as criminals often use these platforms to launder the proceeds of all kinds of crimes through cryptocurrency. In the official notice, the authorities have identified four types of crypto exchanges that have been classified as professional money launderers (PMLs). The Swedish Police and the Financial Intelligence Unit (FIU) of Sweden have jointly finalized this classification of crypto exchanges in the country.
In a report The authority said the ability to launder large amounts of assets between crypto wallets internationally, without the supervision of an intermediary, has attracted criminals to the crypto sector.
“FIU Sweden’s assessment is that there is an increasing demand for PML from organized crime and that the services they provide are crucial to the criminal economy,” the report said. “There are also individual crypto exchange providers that are more closely connected to criminal networks, who typically do not advertise their services publicly.”
Swedish authorities have divided illegal crypto exchanges (and exchanges operating without a license) into four profiles, describing the different ways they are exploited by criminals: node exchange providers, hawala exchange providers, asset exchange providers, and platform exchange providers.
Under the first two categories, Sweden blames crypto exchanges for playing a crucial role in sustaining the criminal economy, while also hosting underground banking networks. In the other two categories, authorities there allege that illegal businesses related to cryptocurrencies also provide criminals with ways to launder their illicit funds.
“Crypto exchange providers in the form of PMLs can serve a diverse customer base. The demand for crypto exchange services is very high among criminals, suggesting that cryptocurrency use is widespread within the criminal arena. By feeding the criminal infrastructure, the crypto exchange provider is part of a larger context. Their services support influential criminals in organized crime, helping to finance the spiral of violence and other serious crime,” the report said.
Sweden reportedly considers cryptocurrencies such as Bitcoin as taxable financial instruments. Currently, the crypto sector is largely unregulated in the country.
The country is part of the European Union (EU) — and the bloc has already implemented a comprehensive set of regulations to govern the crypto sector, the so-called MiCA framework. Sweden has suggested that crypto trading platforms that adhere to MiCA laws be on the lookout for unrecognizable trading patterns on their customers’ wallets.
