Cryptocurrencies: Risks of money laundering and terrorist financing have increased
Over the last ten years, cryptocurrencies have developed into a mass phenomenon that is increasingly being misused for criminal purposes.
The Interdepartmental Coordination Group on Combating Money Laundering and Terrorist Financing (CGMF) publishes the latest findings on cryptocurrencies - or "virtual assets" - in a report and proposes measures.
In Switzerland, more and more financial intermediaries are offering virtual asset services. The boundaries between the traditional financial sector and cryptocurrencies are becoming blurred as these virtual assets are increasingly being integrated into conventional payment platforms. Criminals have recognized the potential of this technology. Cryptocurrencies are being misused for a wide range of illegal purposes, from theft and fraud to the most serious forms of transnational crime, including money laundering and terrorist financing. Among other things, the KGGT concludes that the risks of money laundering and terrorist financing have increased significantly with the growing importance of virtual assets.
Suspicious activity reports and loss amounts on the rise
In recent years, financial intermediaries in Switzerland have increasingly identified suspected transactions in connection with money laundering and terrorist financing. This has led to a sharp increase in suspicious activity reports relating to virtual assets to fedpol's Money Laundering Reporting Office Switzerland (MROS). In 2022, almost 14% of all SARs were related to virtual assets. The losses incurred through the misuse of virtual assets have risen sharply and amounted to at least a double-digit million amount in Switzerland for 2022.
Proposals to mitigate risks
The report identifies the risks for Switzerland and proposes measures to mitigate these risks and effectively combat money laundering and terrorist financing. This includes improving the level of data and knowledge on the virtual assets sector, as well as proactively promoting the reporting behavior of financial intermediaries who work with virtual assets. All stakeholders involved in the fight against money laundering and terrorist financing must provide sufficient capacity and resources. The report also sees Switzerland's further strengthening of international cooperation as a key to successfully combating the misuse of virtual assets.
Source: Federal Office of Police
