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The Swiss Financial Market Supervisory Authority (FINMA) has recognized digital assets as a significant risk area for money laundering in its most recent Risk Monitor report.
In the annual report, FINMA underscored the vulnerabilities associated with digital assets, pointing out their involvement in financial crimes such as sanctions evasion and the necessity for stringent regulatory oversight to address these risks.
FINMA Releases 2024 Risk Monitor Report
The report indicated that cryptocurrencies, especially stablecoins, are increasingly associated with money laundering and other illicit activities. This encompasses their role in sanctions evasion and transactions on the dark web, raising alarm among financial regulators.
“Regarding digital assets, FINMA implements institution-specific measures to reduce the money laundering risk,” stated the agency.
Swiss financial intermediaries providing crypto-related services are facing intensified scrutiny to address these risks. According to FINMA, inadequate risk management in this domain threatens individual institutions and presents reputational risks to the wider Swiss financial industry.
“Cryptocurrencies are frequently utilized in cyberattacks or as a method of payment for illegal trading on the dark web,” the report noted.
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Nepal FIU Raises Alarm on Increasing Crypto Misuse in Money Laundering
Nepal’s Financial Intelligence Unit (FIU), functioning under the Nepal Rastra Bank, has also expressed concerns regarding the recent rise in the exploitation of cryptocurrencies for money laundering and cyber fraud.
Despite a nationwide prohibition on digital asset trading, the FIU reported that criminals are using cryptocurrencies to transfer illicit funds across borders, complicating the tracking of financial crimes.
According to the FIU’s latest “Strategic Analysis Report,” offenders frequently convert illegal money into cryptocurrencies before moving it offshore, making it more challenging to trace.
The report also pointed out a rise in fraudulent crypto investment schemes targeting Nepalese citizens via social media, where victims are lured with promises of high returns but ultimately lose their investments.
The FIU identified underreporting as a significant obstacle in addressing crypto-related fraud. Many victims, fearing legal repercussions or social stigma due to the ban on crypto trading, tend to refrain from reporting such incidents.
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