The Swedish Police Authority and the Financial Intelligence Unit (FIU) have made a significant move by classifying cryptocurrency exchanges as “professional money launderers (PML)” after conducting an analysis of services provided by unlicensed and illegal providers. According to the FIU, these PMLs have criminal links and facilitate numerous individuals and criminal networks in systematically laundering money.
The FIU has identified four profiles of professional money launderers within the cryptocurrency exchange space: the node exchange provider, the hawala exchange provider, the asset exchange provider, and the platform exchange provider. This categorization sheds light on the various ways in which illegal cryptocurrency exchanges operate and enable money laundering activities.
In response to this alarming trend, the report has called for increased law enforcement presence on crypto trading platforms to crack down on illegal services. The FIU emphasized the importance of monitoring suspicious trading patterns and taking necessary actions to prevent money laundering activities. At the same time, the Swedish authorities have recognized the role of licensed and legitimate crypto trading platforms in combating money laundering and urged them to remain vigilant.
This crackdown on illegal cryptocurrency-related activities in Sweden has also extended to the nation’s Bitcoin mining community. The Swedish Tax Agency recently investigated 21 crypto-mining firms between 2020 and 2023 and found discrepancies in their tax filings. It was revealed that 18 crypto-mining firms had provided misleading or incomplete information to evade paying value-added tax on taxable operations, leading to tax evasion and unreported crypto assets.
The crypto mining firms contested the $90 million tax demand, with two firms successfully appealing against the verdict. The administrative court adjusted the tax amounts for these firms based on the court’s rulings. This development highlights the challenges faced by authorities in regulating the cryptocurrency industry and ensuring compliance with tax laws.
Overall, Sweden’s classification of cryptocurrency exchanges as professional money launderers underscores the growing concerns surrounding illicit activities in the crypto space. It also emphasizes the need for enhanced regulatory measures and enforcement actions to combat money laundering and uphold the integrity of the financial system.