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Europe’s new anti-money laundering watchdog has warned that crypto assets are its biggest challenge to stop dirty money infiltrating the region’s financial system.
Bruna Szego, chair of the EU Anti-Money Laundering Authority, told the Financial Times that the crypto market is a clear priority because it is “significantly exposed to money laundering and terrorism financing risks”.
Europe needed to be particularly on its guard against these risks, Szego said, because “our market is quite fragmented and many crypto assets service providers are looking to gain licences here” under the new pan-EU licensing framework launched at the start of this year.
Crypto assets also brought heightened risks because of their cross-border nature, their ability to be held anonymously and the speed with which they can be transferred, she said.
AMLA, which was created last year and only formally assumed its legal powers on July 1, signalled its intent to focus on the crypto sector by warning about the risk of “inconsistent controls” between EU national regulators in a statement on Tuesday.
Szego stressed that regulators needed to be “looking at the beneficial owner of the crypto asset service providers — who are their shareholders and where are they”. She added: “We need to be sure the owners are not involved in money laundering or terrorism finance.”
France’s public prosecutor said earlier this year it was investigating Binance over suspicions that the world’s largest cryptocurrency exchange broke EU money laundering and terrorist financing laws — which the company has denied.
Binance’s co-founder Changpeng Zhao stepped down as its chief executive in 2023 before he was sentenced to four months in prison by US officials who also fined the company $4.3bn for failing to prevent money laundering and international sanction breaches.
Szego said that when AMLA takes over direct supervision of about 40 of the biggest and most potentially risky financial institutions in the EU in 2028, “some crypto asset service providers are likely to be among the initial 40 financial institutions we directly supervise”.
Her critical comments echo those of the Financial Action Task Force, an intergovernmental body set up to combat terrorism financing and money laundering, which said last month that many parts of the world “continue to struggle” with regulating crypto assets. It estimated 75 per cent of global jurisdictions were not fully compliant with its requirements.
But these warnings contrast with the more crypto-friendly approach taken by the US administration under President Donald Trump. Washington has dropped several high-profile enforcement cases against digital asset groups and is close to passing legislation to make the sector more closely integrated into the mainstream financial system.
Szego said AMLA would consider several initial options to tackle the risks of crypto assets, including doing a “thematic review” of national authorities and a joint analysis of the market with national financial intelligence units.
The Frankfurt-based authority has only 30 staff currently, but it is rushing to hire more with plans to reach 120 employees by the end of the year, 240 by the end of 2026 and 430 by the time it starts direct supervision in 2028. “It takes six to nine months to hire someone,” said Szego.
On Tuesday, AMLA said that because EU licensing of crypto companies was done by the bloc’s 27 national authorities, “there is a risk of diverging application” of regulatory standards between them.
It committed to use its powers to supervise national authorities to ensure they only approve crypto companies that have effective compliance systems in place “from day one”. Szego said it was important for crypto companies to “have someone on the board who understands” anti-money laundering and counterterrorism finance.
