Luxembourg flags crypto companies as high risk for money laundering

Published

2 months ago

May 27, 2025

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Luxembourg flags crypto companies as high risk for money laundering

Luxembourg classified virtual asset service providers (VASPs) as high-risk entities for money laundering in its 2025 National Risk Assessment (NRA), highlighting concerns over the crypto industry’s exposure to financial crime.

According to the report, the inherent risk level of VASPs is deemed “High,” driven by factors including transaction volume, client reach, distribution channels, legal structures and the international scope of operations.

The NRA identified VASPs as an emerging risk in its 2020 report after “a detailed assessment of ML inherent risks emerging from virtual assets.” This was followed by a 2022 NRA report deeming “the risks associated with crypto assets and virtual currencies as very high,” because, among other things, they are internet-based and cross-border.

EU’s evolving crypto regulation

The European Union, of which Luxembourg is a founding member, has been working to regulate the cryptocurrency industry. A key part of this effort is the Markets in Crypto-Assets (MiCA) framework, which is designed to unify crypto regulation across all 27 EU member states.

Since January, crypto asset service providers have started acquiring licenses to operate legally within the EU. In May, cryptocurrency exchange Kraken launched regulated derivatives trading, and competitor Crypto.com secured a license allowing it to do the same.

MiCA also establishes a new set of requirements for stablecoins. The stablecoin market leader behind USDt (USDT), Tether, refuses to comply with the new rules and was delisted on Crypto.com, Coinbase and leading crypto exchange Binance on their EU platforms.

Money laundering with crypto

As the role of cryptocurrencies in the broader financial ecosystem increases, so does their popularity for money laundering. Earlier this month, Hong Kong police arrested 12 people involved in a cross-border money laundering scheme that relied on crypto and over 500 stooge bank accounts to launder 118 million Hong Kong dollars ($15 million).

Luxembourg — *Crypto value received by illicit addresses per year. Source:* *Chainalysis*

According to reports this month, European law enforcement arrested 17 suspects of a “mafia crypto bank” for allegedly laundering over 21 million euros ($23.5 million) in crypto for Middle East and China-based criminal entities. As a result of the proceedings, 4.5 million euros ($5 million) worth of items were seized, including cash, crypto, 18 vehicles, four shotguns and several electronic devices.

Magazine: Chinese Tether laundromat, Bhutan enjoys recent Bitcoin boost: Asia Express

Politics

Canada joins UK in announcing it will recognise Palestinian state – under certain conditions

Published

2 hours ago

July 31, 2025

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Canada says it will recognise a Palestinian state if certain conditions are met

Canada is planning to recognise a Palestinian state at the United Nations in September, the country’s prime minister has said.

Mark Carney’s announcement comes a day after the UK said it will recognise Palestine as a state unless Israel meets several conditions.

France became the first G7 country to announce the move last week – while Ireland, Spain and Norway all officially recognised a Palestinian state last year.

Mr Carney told reporters in Ontario that Canada would do the same on certain conditions – including that the Palestinian Authority commits to fundamentally reforming its governance, and holds general elections in 2026 in which Hamas can play no part.

The Canadian prime minister said he had spoken with Mahmoud Abbas, the president of the Palestinian Authority, earlier in the day.

Following the announcement, the Israeli foreign ministry said in a statement: “The change in the position of the Canadian government at this time is a reward for Hamas and harms the efforts to achieve a ceasefire in Gaza and a framework for the release of the hostages.”

A White House official anonymously told Reuters that US President Donald Trump also believes he would be “rewarding Hamas” if he recognises a Palestinian state and therefore doesn’t plan to do so.

“President Trump’s focus is on getting people fed,” the official added.

Canada had long stated it would only recognise a Palestinian state at the conclusion of peace talks with Israel.

However, Mr Carney said the reality on the ground – including the starvation of citizens in Gaza – means “the prospect of a Palestinian state is literally receding before our eyes”.

He added: “We are working ourselves, with others, to preserve the possibility of a two-state solution, to not allow the facts on the ground, deaths on the ground, the settlements on the ground, the expropriations on the ground, to get to such an extent that this is not possible.”

The Canadian prime minister also said he “condemns the fact Israel has allowed a catastrophe to unfold in Gaza”.

Sir Keir Starmer announced the UK could recognise a Palestinian state after he had a meeting with Mr Trump the previous day.

Sir Keir said the conditions Israel would have to meet to avoid such a move included taking substantive steps to end the “appalling situation in Gaza”, and agreeing to a ceasefire.

Some 38 members of the House of Lords, including some of the UK’s most eminent lawyers, have since written to the attorney general to say that recognising a Palestinian state could be a breach of international law, The Times has reported.

They have said the territory may not meet the criteria for statehood under the Montevideo Convention, a treaty signed in 1933.

Meanwhile, a Downing Street spokesperson confirmed Sir Keir had spoken to Mr Carney over the phone on Tuesday.

The spokesperson said: “They discussed the grave situation in the Middle East and last night’s action by the United States to tackle the severe threat posed by Iran’s nuclear programme.

“Both reiterated their support for a diplomatic solution and agreed that Iran must come back to the negotiating table with the United States as soon as possible.

“They looked forward to continuing their discussions at NATO this week.”

Gaza’s humanitarian crisis

A global hunger monitor has warned that a worst-case scenario of famine is unfolding in Gaza.

The Hamas-run health ministry reported seven more hunger-related deaths on Wednesday, including a two-year-old girl with an existing health condition.

Meanwhile, at least 48 Palestinians were killed and dozens were wounded while waiting for food at the Zikim Crossing, the main entry point for humanitarian aid to northern Gaza, according to the Shifa Hospital that received the casualties.

It was not immediately clear who opened fire and there was no immediate comment from the Israeli military, which controls the crossing.

Israeli strikes and gunfire had earlier killed at least 46 Palestinians overnight and into Wednesday, most of them among crowds seeking food, health officials said.

The Israeli military did not immediately comment on any of the strikes. It says it only targets militants and blames civilian deaths on Hamas, because the group’s militants operate in densely populated areas.

US special envoy Steve Witkoff will travel to Israel on Thursday to discuss the next steps to address the situation in Gaza, an American official said.