Crypto Can Fight Money Laundering Without Stifling Financial Freedom

Crypto does not have a unique money‑laundering problem when compared with traditional finance, where the practice is at least twice as prevalent and over 90% is believed to go undetected. Blockchain records everything, so when laundering occurs an indelible trail can be traced end to end.

The anti‑money‑laundering system needs to evolve across traditional finance as well as centralized and decentralized crypto. That evolution requires greater communication within the sector, improved feedback mechanisms, a deeper understanding of emerging typologies and more effective dissemination of trends; the recently published European Union AML Regulation (Regulation EU 2024/1624) sets some rules, but more practical work is needed.

Regulators and industry must build guardrails that go beyond mere box‑checking. The main challenge is identifying who owns wallets: blockchain pseudonymity, self‑hosted wallets and mixers make origin and ownership hard to determine.

European Union

crypto, money laundering, traditional finance, blockchain, aml, eu aml, mixers, wallet ownership, pseudonymity, decentralized crypto