The new EU Anti-Money Laundering Authority (AMLA) has warned that the crypto asset market represents one of the biggest money laundering threats. That is why AMLA chair Bruna Szego emphasized that supervising the crypto market is a clear priority, as it is “significantly exposed to money laundering and terrorism financing risk.”

EU regulation of cryptocurrencies and money laundering risk

Szego called for a unified framework of rules for the cryptocurrency and crypto asset market at the European Union level. “Our market is quite fragmented, and many crypto asset service providers are looking to gain licenses here,” she said in an interview with the British daily Financial Times. [1]

According to Szego, crypto assets pose heightened risks because of their cross-border nature, anonymity, and the speed of transfers. AMLA signaled its intent to focus on the crypto asset market by warning about the risk of “inconsistent controls” between EU national regulators.

Szego stressed that regulators must carefully examine the beneficial owners of crypto asset service providers — identifying who their shareholders are and where they are based. “We need to be sure the owners are not involved in money laundering or terrorism finance,” she added.

AMLA strengthens oversight and expands capacity

The AMLA chair also noted that the watchdog will take over direct supervision of about 40 of the largest 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,” she explained.

Earlier this week, AMLA warned that because EU licensing of crypto companies is conducted by the bloc’s 27 national authorities, there is a risk of diverging application of regulatory standards between them. The watchdog also committed to using its powers to oversee national authorities to ensure they only approve crypto companies with effective compliance systems in place from the start.

Szego further underlined that it is crucial for crypto companies to employ staff who understand the principles of anti-money laundering and counterterrorism finance.

Based in Frankfurt am Main, the authority employs just 30 staff members but plans rapid expansion: at least 120 by the end of this year, 240 by the end of 2026, and 430 by the time it begins direct supervision in 2028. “It takes six to nine months to hire someone,” Szego concluded.

Sources:

[1] https://www.ft.com/content/84a4d927-3597-4c51-b8c9-86215f682eda