Swiss authority sounds alarm on crypto money laundering

Switzerland's Financial Market Supervisory Authority (FINMA) is raising concerns about rising money laundering risks in the crypto industry. 

In its 2024 Risk Monitor report, the regulator revealed that stablecoins and cryptocurrencies are increasingly being misused for illegal activities. It pointed out that stablecoin usage has risen in cases like sanction evasion. 

The report also highlighted that Switzerland, known as a “leading global cross-border wealth management hub for private clients”, faces unique risks due to its role in global finance. 

FINMA stressed the need for stronger measures to address these vulnerabilities, warning that “financial intermediaries"—companies handling financial transactions—without adequate money-laundering controls could damage Switzerland's financial reputation.

This warning can be linked to the regulator's earlier FINMA Guidance 06/2024 report, which urged banks and stablecoin issuers to follow strict rules. These include verifying the identity of stablecoin holders and confirming who the actual owners are. 

To step up its defenses, FINMA has introduced measures for boosting defenses and mitigating threats, including on-site inspections and higher risk management requirements.

It explained that “an effective anti-money laundering policy is based on the financial intermediary's executive management striking the right tone from the top and setting clearly defined risk tolerance.”

This means avoiding business with risky clients, services, or countries. FINMA added that “firms must ensure that the tolerated risks can be monitored and limited effectively at all times.” 

For anyone new to crypto, this is a reminder to use platforms that follow anti-money laundering rules. Choosing reputable platforms not only protects your investments but also helps ensure the crypto space stays legitimate.

FINMA emphasized that financial institutions must align their risk management with their business activities and use reliable controls to manage any remaining risks.

By taking these steps, Switzerland aims to protect its global reputation while ensuring the crypto industry develops responsibly.