By PAUL O’DONOGHUE, Senior Correspondent
AMLA, the EU’s AML watchdog, should launch an “urgent investigation” into the use of crypto as a vehicle for money-laundering across Europe, according to Regina Doherty MEP.
Her comments come after the ‘Coin Laundry’, a major international probe, uncovered widespread crypto-backed criminality.
“We now have clear proof that criminals are exploiting weak points in the crypto ecosystem,” she said.
“The EU has the laws. What we need is serious enforcement and real accountability. Anything less leaves citizens, businesses and our financial system exposed.”
AML Intelligence revealed yesterday that AMLA is strongly considering investigating the ‘Coin Laundry’ revelations.
Doherty’s comments come after hosting a meeting of the AML Intelligence ‘Compliance Council’ at the European Parliament.
During the event she described the crypto sector as “the Wild West of finance”.
She said the ‘Coin Laundry’ traced “thousands of contaminated transactions tied to drug-trafficking groups”. It also linked crypto to “cyber-gangs and large-scale fraud, exposing a system where illicit money can be washed with ease”, she said.
Doherty added that European officials “must not wait any longer” to act on crypto’s links to illict finance.
“AMLA must act now to close the glaring oversight gaps and hold platforms and enablers to accoun,” she said..
‘Coin Laundry’ and AMLA probe
The ‘Coin Laundry’ investigation from the International Consortium of Investigative Journalists (ICIJ) revealed how crypto exchanges play a key role in facilitating illicit activity. It found that many exchanges offer a fast way to convert ill-gotten crypto into standard currency.
For this reason, regulators and law enforcement, particularly in Europe, have demanded the exchanges to implement AML safeguards.
However, “such actions could eat into exchanges’ revenues, which are largely derived from transaction fees,” the ICIJ claimed this week.
Analysts believe that the US is unlikely to launch a major federal inquiry into the revelations. The country has been notably pro-crypto under the Trump regime.
However, a senior source at AMLA told AML Intelligence that the watchdog is “taking an active interest in crypto”.
“You can take it, AMLA is very interested in what has been revealed,” the source said.
“What has been revealed this week about the extent of money laundering in crypto is not necessarily surprising, but it is staggering,”
Among other revelations, the ICIJ found a Binance-hosted address that the US Treasury attributed to a money launderer for Mexico’s violent Sinaloa drug cartel received nearly all its $700,000 funding from accounts at Coinbase.
Binance “did not respond to specific questions” about hosting a Sinaloa-linked cartel account, the ICIJ said. Coinbase said that it was aware of the transactions relating to the cartel. The company told the ICIJ that, “through communications with the U.S. government, it resulted in the wallet address being sanctioned.”
Coinbase itself was fined €21.5 million this month by the Central Bank of Ireland for lax AML controls.
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