Authorities classify unlicensed exchanges, urging stricter regulation and compliance in the crypto space.
The Swedish Police Authority and the Financial Intelligence Unit (FIU) have taken a significant step in addressing concerns about cryptocurrency exchanges. They have classified some of these exchanges as "professional money launderers" (PML) after conducting an in-depth analysis of services offered by unlicensed providers.
The FIU's analysis led to the identification of four distinct profiles of PMLs within the crypto space: node, hawala, asset, and platform exchange providers. Each of these profiles represents different ways in which crypto exchanges can potentially facilitate illegal activities.
Node providers are involved in the technical infrastructure of cryptocurrency transactions. Hawala providers operate in a more traditional, informal money transfer system. Asset providers deal with the exchange of digital assets, while platform exchange providers offer a marketplace for buying and selling cryptocurrencies.
The report emphasizes the need for increased law enforcement efforts on crypto platforms to combat illegal activities. By identifying these profiles, authorities aim to better understand and tackle the methods used for money laundering through cryptocurrencies.
However, the report also acknowledges the positive role that licensed exchanges play in preventing money laundering. These exchanges adhere to regulations and implement measures to ensure transparency and compliance with financial laws.
In addition to the focus on exchanges, Sweden's Tax Agency has uncovered tax discrepancies in the filings of crypto-mining firms. This finding highlights another area of concern where regulatory oversight is crucial to ensure that all participants in the cryptocurrency ecosystem are adhering to tax laws.
