Luxembourg warns: Crypto providers at great risk from money laundering!

Luxembourg warns: Crypto providers at great risk from money laundering!

Luxembourg has classified virtual asset service providers (VASPs) as companies with a high money laundering risk in its 2025 national risk assessment (NRA). This classification stems from ongoing concerns about the crypto industry's vulnerability to financial crime. The risk level of VASPs is classified as “high” and is based on criteria such as transaction volume, customer reach, distribution channels, legal structures and international reach, such as Cointelegraph reported.

Back in 2020, a report identified VASPs as an emerging risk, and a subsequent report from 2022 classifies the risks associated with crypto assets as very high. This is primarily due to the internet-based and cross-border nature of these investments. With this in mind, the European Union is working on comprehensive regulation of the cryptocurrency industry, known as the Markets in Crypto-Assets (MiCA) Regulation. This regulation aims to unify the regulatory framework for cryptocurrencies across all 27 EU member states while introducing stricter rules against money laundering.

MiCA: Stricter regulation and requirements

With the introduction of the MiCA regulation, cryptocurrency service providers have been required to obtain licenses to operate legally in the EU since January. This regulation aims to make the integration of cryptocurrencies into the financial ecosystem safer. While some platforms such as Kraken and Crypto.com have already been able to introduce regulated derivatives trading, one problem example highlights the challenges associated with complying with new laws. Tether, the issuer behind USDt (USDT), has refused to comply with the new regulations, leading to its delisting on major European platforms.

The MiCA regulation brings with it significant changes. It requires the identification of users by platforms and wallet providers as well as the documentation and monitoring of transactions. In addition, transactions above certain value limits must be made transparent. In view of this, national and European financial authorities closely monitor wallets and transactions and, if necessary, confiscate devices anwalt.de described in detail.

Investigations and international cooperation

The risks of money laundering are not just theoretical. Recent events show how serious the situation is. In Hong Kong, for example, 12 people were arrested for being involved in a cross-border money laundering scheme using over 500 bogus accounts to launder $15 million. At the European level, investigative authorities have arrested 17 suspects from a crypto bank described as “mafia-like” who are said to have laundered over 21 million euros in cryptocurrencies for criminal organizations in the Middle East and China. During the investigation, valuable items worth 4.5 million euros were seized, including cash, cryptocurrencies, vehicles and electronic devices.

The European Union and national authorities are intensifying their efforts to efficiently combat money laundering related to cryptocurrencies. Lawyer Andreas Junge warns that even harmless transactions can raise suspicion and the consequences of money laundering allegations are serious. These include high fines, prison sentences of up to ten years and the confiscation of crypto assets. He therefore recommends careful documentation of all transactions and the use of reputable, regulated platforms. If money laundering is suspected, timely advice is essential.