Swedish Police Crack Down on Crypto Exchanges, Accusing Them of Money Laundering
The Swedish Police Authority, in partnership with the Financial Intelligence Unit (FIU), has recently targeted certain cryptocurrency exchanges, labeling them as “professional money launderers” (PMLs). This crackdown aims to tackle unlicensed and illegal operators in the crypto industry.
The FIU believes that these exchanges have connections to criminal activities and are facilitating systematic money laundering for individuals and organized crime networks. To analyze their operations, the FIU has classified PMLs into four profiles based on their characteristics: node exchange providers, hawala exchange providers, asset exchange providers, and platform exchange providers.
The FIU is advocating for increased law enforcement presence and intervention on crypto trading platforms to combat these illicit activities. The agency considers illicit cryptocurrency providers to be an emerging threat within money laundering schemes and an essential part of organized crime’s ability to maintain and expand their criminal markets.
While cracking down on illegal activities, Swedish authorities also recognize the positive role of licensed and legitimate crypto exchanges in reducing money laundering risks. They urge compliant platforms to remain vigilant, monitor suspicious trading patterns, and take proactive measures, such as halting suspicious transactions and offboarding clients involved in illegal activities.
In addition to targeting illegal activities, Sweden is also focusing on tax evasion within its Bitcoin mining community. A recent investigation by the Swedish Tax Agency uncovered that 18 out of 21 crypto-mining firms had submitted misleading or incomplete tax information between 2020 and 2023. These discrepancies resulted in an estimated $90 million in unpaid taxes. The tax authority is also concerned about potential money laundering activities within the crypto mining sector.
Currently, crypto mining data centers operate outside the scope of regulatory oversight due to their exclusion from the Money Laundering Act. This poses a risk of illicit financial transactions. The tax agency’s findings have led to legal appeals from the affected mining companies. Two firms have successfully reduced their liabilities, and the court has adjusted the amounts accordingly.
Western Europe has emerged as a leading region in global crypto adoption, with Germany and France at the forefront. Austria has experienced significant yearly growth, with a 70% increase in users. The younger generations, particularly Gen Z and Millennials, are driving cryptocurrency adoption in Europe, according to a survey commissioned by crypto exchange Bitpanda. Switzerland has the highest digital currency ownership at 23% of its population, followed by Austria at 18% and France at 14%. Germany and Italy have lower ownership rates at 11% and 9% respectively.
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