Luxembourg Rings Alarm: Crypto Exchanges Still a Hotbed for Money Laundering Despite Dip in Volumes

Authorities Warn of Persistent High Risks

Hold onto your hats, folks! Even though trading volumes have taken a nosedive, Luxembourg's watchdogs are sounding the alarm: crypto exchanges are still a major hotspot for money laundering, thanks to their slick online operations and global tentacles.

Listen up, because Luxembourg's latest National Risk Assessment is not pulling any punches. It's shouting from the rooftops that the risks are still sky-high, even with fewer transactions over the last couple of years. You heard it here first!

Get this: the 2025 report is straight-up calling the inherent risk of crypto businesses "high." And what's fueling this fire? A cocktail of client volumes, transactions, how they're distributed, the size of the operations, who owns them, what they're selling, and their international swagger. It's a perfect storm, my friends!

Here's the kicker: the report is also screaming that crypto, especially when it comes to investment fraud, "has become more prevalent." And why? Because certain crypto assets are skyrocketing in value and the media can't stop buzzing about crypto investments. It's like pouring gasoline on a fire!

But wait, there's more! The report is pointing fingers at non-compliant crypto service providers with pathetic KYC standards, chilling in offshore havens. These shady characters are making cryptocurrency investigations a nightmare, dragging them out with endless MLA procedures. It's a real headache!

Luxembourg's NRA report

Now, let's talk numbers. Back in 2021, Luxembourg-registered crypto exchanges were processing a whopping 30.2 million transactions worth €106.8 billion. But fast forward to 2023, and that figure has plummeted to 19.7 million transactions worth €22.6 billion. Why? Blame it on the market going cold and regulators turning up the heat. And get this: almost all clients (99%) are regular Joes and Janes, with hardly any politically exposed persons in the mix. It's a wild ride, and we're just getting started!