Sweden has classified some crypto exchanges and crypto-related service providers as ‘professional money launderers’ claiming that these platforms are often used by criminals to launder proceeds from all types of crimes via cryptocurrency. In the official notice, the authorities have identified four types of crypto exchanges that have been designated as professional money launderers (PMLs). The Swedish Police Authority and the Financial Intelligence Unit (FIU) of Sweden have collectively finalised this classification of crypto exchanges in the country.
In a report compiled by Sweden’s FIU, the authority states that the ability to launder large volumes of assets between crypto wallets internationally, without the oversight of an intermediary, has drawn criminals towards the crypto sector.
“The assessment from FIU Sweden is that there is an increasing demand for PML from organised crime and that the services they provide are pivotal for the criminal economy,” the report said. “There are also individual crypto exchange providers that are more tightly connected to criminal networks, who do not typically advertise their services publicly.”
The Swedish authorities have divided illegal crypto exchanges (and those operating without a licence) into four profiles, outlining the different ways they are being exploited by criminals — node exchange providers, hawala exchange providers, asset exchange provider, and platform exchange provider.
Under the first two categories, Sweden blames crypto exchanges for playing a crucial role in maintaining the criminal economy while also harbouring underground banking networks. In the other two categories, the authorities there claim illicit businesses related to cryptocurrencies are also giving criminals ways to launder their unlawful funds.
“Crypto exchange providers in the form of PMLs can accommodate a diverse client base. The demand for crypto exchange services is very high among criminals, which suggests that the use of cryptocurrency is widespread within the criminal arena. By fueling the criminal infrastructure, the crypto exchange provider is part of a larger context. Their services support influential criminals in organised crime, thus helping to finance the spiral of violence and other serious crime,” the report noted.
The country is part of the European Union (EU) — and the bloc has already deployed a comprehensive set of regulations to govern the crypto sector called the MiCA framework. Sweden has suggested crypto trading platforms adhering to the MiCA laws to be very observant of any unrecognised patterns of trading on their client’s wallets.
