The Swiss Financial Market Supervisory Authority (FINMA) has designated digital assets as a high-risk area for money laundering in its latest Risk Monitor report. The annual report underscores the vulnerabilities posed by digital assets, with particular emphasis on their potential role in financial crimes such as sanctions evasion. FINMA highlighted the urgent need for robust regulatory oversight to mitigate these growing risks within the financial sector.
The 2024 Risk Monitor report detailed how cryptocurrencies, especially stablecoins, are becoming increasingly associated with money laundering and other illicit activities. This includes their use for sanctions evasion and transactions on the dark web, raising alarms among global financial regulators. “In relation to digital assets, FINMA takes institution-specific measures to mitigate the money laundering risk,” stated the agency.
Swiss financial intermediaries involved in crypto-related services face intensified scrutiny to ensure they properly manage these risks. According to FINMA, inadequate risk management can endanger not only individual institutions but also the reputation of the broader Swiss financial system. The report stated, “Cryptocurrencies are often used in cyberattacks or as a means of payment for illegal trading on the dark web.”
Nepal FIU Warns of Rising Crypto-Related Money Laundering
In a parallel development, Nepal’s Financial Intelligence Unit (FIU), under the Nepal Rastra Bank, expressed concerns over the increasing misuse of cryptocurrencies for money laundering and cyber fraud. Despite a national ban on trading digital assets, the FIU observed that fraudsters exploit cryptocurrencies to move illicit funds across borders, further complicating financial crime investigations.
The FIU’s latest “Strategic Analysis Report” revealed that criminals frequently convert illegal earnings into cryptocurrencies before transferring the assets offshore, thereby complicating efforts to trace and address financial crimes. The report also noted a spike in fraudulent crypto investment schemes that target Nepalese citizens through social media, offering high returns but often leaving victims defrauded.
Underreporting remains a major challenge in combating crypto-related fraud in Nepal. Due to the national ban on crypto trading, many victims fear legal repercussions or social stigma and thus avoid reporting such crimes. This reluctance hinders law enforcement’s ability to address the rising issue effectively.
