The Swedish Police Authority, along with the Financial Intelligence Unit (FIU), has labelled cryptocurrency exchanges as “professional money launderers (PMLs)” following an investigation into services offered by unregulated and illegal operators.
The FIU claimed these crypto exchanges are tied to criminal organisations, and they help facilitate the systematic laundering of funds for various individuals and criminal networks.
“FIU Sweden identifies unregulated cryptocurrency providers as a growing threat in money laundering operations and a key element for organized crime to sustain and grow their illicit markets,”
the report read.
The FIU’s analysis identified four distinct types of PMLs based on their operational traits: node exchange providers, hawala exchange providers, asset exchange providers, and platform exchange providers.
The report urged law enforcement to take a more active role on cryptocurrency trading platforms to combat illegal activities.
However, the authorities acknowledged the importance of licensed and legitimate cryptocurrency trading platforms in the fight against money laundering. They urge these platforms to actively monitor suspicious user activity and to take necessary actions, such as halting transactions and offboarding clients, when necessary.
Meanwhile, Sweden’s ongoing crackdown on illegal cryptocurrency activities has recently shifted its focus to the country’s Bitcoin mining sector. Following a government investigation, Swedish crypto miners now owe over $90 million in taxes due to four years of misappropriations.
The Swedish Tax Agency, Skatteverket, investigated 21 crypto-mining companies between 2020 and 2023, discovering that 18 of these companies had submitted “misleading or incomplete” information to exploit tax incentives. Some firms provided false business descriptions to avoid paying value-added tax (VAT), while others dodged import taxes on mining equipment or income taxes on mining revenue.
In total, these firms are required to pay 990 million Swedish krona ($90 million), including unpaid VAT of 932 million krona ($85.4 million) and tax surcharges of 57.9 million krona ($5.3 million). According to the agency, this fraudulent behaviour has led to significant tax losses due to improper VAT payments and unreported crypto assets.
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