Europe Launches An All-out War On The Use of Crypto For Money Laundering


According to a Wednesday report, the Council of Europe’s Moneyval committee has charged European states to immediately clamp down on those using crypto for money laundering. The regulator also warns about the problems associated with decentralized finance, and repeatedly stressed on how easily, crypto markets can be manipulated.

To this effect, Moneyval Chair Elżbieta Frankow-Jaśkiewicz has also made a rallying call to everyone concerned. She noted that there’s need to be wary of the new methods that crypto criminals are now using. She wrote in part:

“Methods are becoming ever more sophisticated, and larger in scale.”

Keen Eyes On Money Laundering

Meanwhile, the report also called for better coordination amongst agencies, even as they continue to keep an eye on the fast-growing sector. Furthermore, the report also claimed that a study is currently ongoing, regarding money laundering trends. However, the study will not be due until sometime later in the year.

Interestingly, Frankow-Jaśkiewicz also claims that there’s some serious market manipulation going on with the leading virtual assets. And according to Frankow-Jaśkiewicz, this is usually a recipe for money laundering. She also added:

“There is suspicion that some of the smaller cryptocurrencies are being set up specifically with the motive of laundering.”

It should be noted however, that Moneyval’s jurisdiction does not extend beyond some small European territories that are not supervised by the Paris-based FATF. Countries covered by Moneyval include the likes of Estonia, Malta, and Gibraltar. But despite the lack of wide jurisdiction, recommendations from Moneyval can still influence national policies and reforms.

Crypto Users May Be Kicking Against New Rules

Meanwhile, for what it’s worth, the committee’s call for a stricter approach towards virtual assets is not exactly an alone decision. Other regulators including the Financial Action Task Force (FATF) are actively doing the same currently. But notably, the decision of Europe to implement strict FATF rules, which would see that crypto users are identifiable and funds are traceable, have been met by wide criticisms.

Crypto enthusiasts have claimed that the FATF rules are controversial at best. In fact, many feel that those rules would undermine the privacy concept, upon which the entire crypto industry is built.

Nonetheless, regulators must find a way to implement rules that will curb the menace of illicit use of cryptocurrencies. But even more importantly, these rules must also allow innovation to flourish and should come across as crypto-friendly as possible.

Mayowa Adebajo

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