Switzerland’s Financial Market Supervisory Authority (FINMA) has raised concerns about the growing risks of money laundering linked to cryptocurrencies.
In its 2024 Risk Monitor report, the regulator highlighted how cryptocurrencies are being used for cyberattacks, illegal transactions on the dark web, and to circumvent sanctions amid ongoing geopolitical tensions. Stablecoins were particularly implicated; the report painted a picture of their growing role in illicit activities complicating anti-money laundering (AML) efforts. The regulator also warned that financial intermediaries in the crypto sector lacking proper risk management measures could face legal action and reputational harm.
To address these risks, FINMA outlined a comprehensive approach, including onsite inspections, a revamp of its audit program, and a heightened focus on risk management for entities with politically exposed individuals or connections to high-risk regions.
Earlier this year, the regulator had issued guidelines addressing stablecoin risks, requiring issuers to verify token holders’ identities. It mandated that banks offering stablecoin-backed guarantees needed a banking license, though exemptions applied if financial lenders provided guarantees.
In its new report, FINMA noted that it implements institution-specific measures to mitigate money laundering risks associated with digital assets. It claimed applying focused oversight helps to effectively address potential vulnerabilities.
Regulatory concerns surrounding cryptocurrencies and stablecoins extend far beyond Switzerland, as nations worldwide are heightening scrutiny over their potential links to money laundering and other illegal activities. This has spurred calls for stricter oversight across multiple jurisdictions. Australia’s AUSTRAC warned about rising misuse of digital assets in its 2024 Money Laundering Risk Assessment, urging exchanges to register under AML/CTF laws. Also, China, for the first time, incorporated virtual asset transactions into its anti-money laundering laws.
The United Kingdom’s Treasury’s recent supervisory update revealed an increase in crypto-related money laundering risks between 2022 and 2023. Cryptocurrency
firms, alongside retail and wholesale banking, were flagged as high-risk sectors.
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