Crypto drives growth of multi-tiered money laundering, Eurasian AML regulator warns

Crypto is fueling a rise in complex money laundering schemes in 2024, the Eurasian Group on Combating Money Laundering warns in its latest report.

Money laundering schemes increasingly rely on crypto and multi-layered methods in 2024, highlight the growing complexity of illicit financial flows, Russia‘s state-run news agency reports, citing a recent report from the Eurasian Group on Combating Money Laundering.

The report, which covers risks related to money laundering and terrorism financing, underscored the involvement of professional money launderers who are utilizing cryptocurrencies, fake identities — known in Eurasia as “droppers” — and even cash in these operations. The report noted that “schemes with the use of crypto exchanges, including foreign ones, and crypto wallets, which are mainly opened under false identities,” have been “identified in terrorism financing.”

Financial regulators are raising concerns about crypto’s role in illicit financing beyond Eurasia. In late November, Switzerland’s Financial Market Supervisory Authority issued a warning about the risks of money laundering tied to cryptocurrencies, pointing out that assets like stablecoins are increasingly being used for cyberattacks, illegal dark web transactions, and sanctions evasion linked to geopolitical conflicts.

Stablecoins, in particular, have seen a “big rise” in illicit transactions, complicating anti-money laundering efforts. In response, FINMA outlined its broader initiatives to address these risks, including onsite reviews, updates to its audit program, and enhanced focus on risk tolerance and management for entities with politically exposed clients or links to high-risk regions.