Sweden Classifies Some Cryptocurrency Exchanges as “Professional Money Launderers”

In a report prepared by Sweden’s Financial Intelligence Agency, the agency noted that the ability to launder large amounts of assets between international crypto wallets without the oversight of intermediaries has attracted criminals to the cryptocurrency space.

“The Swedish Financial Intelligence Unit assesses that there is an increasing demand for PML from organized crime and that the services they provide are vital to the criminal economy,” the report states. “There are also individual cryptocurrency transactions that are more closely linked to criminal networks. providers, they generally do not advertise their services publicly.”

Swedish authorities have divided illegal cryptocurrency exchanges (as well as those operating without a license) into four types, outlining the different ways criminals exploit them – Node Exchange Providers, Hawala Exchange Providers, Asset Exchange Providers and platform exchange providers.

In the first two categories, Sweden accuses cryptocurrency exchanges of playing a vital role in sustaining the criminal economy while also harboring underground banking networks. In the other two categories, authorities claim that illegal businesses related to cryptocurrencies also provide criminals with a way to launder illicit funds.

“Cryptocurrency exchange providers in the form of PML can accommodate a diverse customer base. The demand for cryptocurrency exchange services by criminals is very high, which shows that the use of cryptocurrency is very widespread in the criminal field. By fueling criminal infrastructure “Cryptocurrency exchange providers become part of a larger context in which their services provide support to influential criminal elements in organized crime, thereby financing the escalation of violence and other serious crimes,” the report states.

Sweden reportedly considers cryptocurrencies such as Bitcoin to be taxable financial instruments. Currently, the cryptocurrency industry is largely unregulated in the country.

The country is part of the European Union (EU), which has deployed a comprehensive set of regulations to govern the cryptocurrency industry, known as the MiCA framework. Sweden advises cryptocurrency exchanges complying with MiCA laws to strictly observe any unidentified transaction patterns on customer wallets.