EU Watchdog Signals Crypto Money Laundering Probe as Big Tech Faces Scrutiny Over Scam Ads

The European Union's new anti-money laundering watchdog is preparing to launch investigations into cryptocurrency exchanges following revelations that criminals are using digital assets to launder billions in illicit funds. The announcement comes as regulators intensify pressure on technology companies to take responsibility for fraudulent activities on their platforms, marking a significant escalation in Europe's crackdown on financial crime.

Bruna Szego, Chair of the EU's Anti-Money Laundering Authority (AMLA), has indicated that crypto will become a major focus for the newly-established body, telling industry leaders that the watchdog plans to "take a close look" at how digital currencies are being exploited by criminal networks.

Background and Context

The heightened scrutiny follows the "Coin Laundry" investigation, which exposed how organized crime groups have been systematically using cryptocurrency exchanges to move illicit proceeds across borders. The findings prompted Regina Doherty, a Member of the European Parliament, to formally call on AMLA to investigate the sector's compliance with anti-money laundering regulations.

Cryptocurrency's role in facilitating financial crime has become increasingly apparent as digital assets have gained mainstream adoption. Unlike traditional financial institutions, many crypto exchanges have operated with minimal oversight, creating what investigators describe as a significant blind spot in global anti-money laundering efforts. The situation is complicated by the fact that most major crypto exchanges are owned by U.S.-based companies, potentially limiting the effectiveness of purely European regulatory action.

Key Figures and Entities

Bruna Szego, as Chair of AMLA, will play a pivotal role in shaping the European approach to crypto regulation. Her statements at a recent gathering of compliance professionals in Brussels suggest that the authority intends to move quickly on addressing crypto-related money laundering risks. Szego's position places her at the intersection of European financial regulation and international law enforcement cooperation.

Regina Doherty MEP has emerged as a vocal advocate for stronger crypto oversight within the European Parliament. Her call for formal investigations reflects growing concern among lawmakers about the sector's vulnerability to exploitation by criminal elements. Doherty's intervention demonstrates how parliamentary pressure is influencing AMLA's enforcement priorities.

The technology sector, particularly Meta Platforms, has also come under scrutiny following revelations that approximately 10% of the company's revenue derives from scam advertisements. This disclosure has intensified calls for holding social media platforms accountable for fraudulent content distributed through their networks.

Legal and Financial Mechanisms

AMLA, which began operations earlier this year, represents the EU's most ambitious attempt to centralize anti-money laundering supervision across member states. The authority's mandate includes direct supervision of high-risk financial institutions, coordination of national AML/CFT frameworks, and support for criminal investigations.

The crypto sector presents particular challenges for regulators due to its pseudonymous nature and cross-border functionality. Criminals have exploited these features through techniques such as chain-hopping (moving funds between different cryptocurrencies), mixing services (obscuring transaction origins), and the use of privacy coins designed to conceal transaction details.

In the technology sector, current legal frameworks have largely shielded platforms from liability for scam advertisements hosted on their networks. However, regulatory proposals under consideration in Brussels would establish clearer responsibilities for platforms to prevent fraudulent content, potentially creating avenues for victims to seek compensation.

International Implications and Policy Response

The EU's aggressive stance on crypto regulation contrasts with approaches in other major jurisdictions. While the United Kingdom's Serious Fraud Office has launched its first major crypto investigation, U.S. regulators have been slower to pursue comprehensive oversight of digital asset exchanges. This regulatory divergence creates potential enforcement gaps that criminals may continue to exploit.

The location of AMLA's headquarters became a contentious issue during its establishment, with the European Parliament initially supporting Madrid while EU governments ultimately selected Frankfurt. This decision-making process reflects the political tensions surrounding anti-money laundering policy and the economic interests at stake in hosting such a significant regulatory body.

Beyond the financial sector, regulators are increasingly focusing on non-financial businesses that may be vulnerable to money laundering exploitation. Recent enforcement actions against Canadian real estate companies and UK gambling operators demonstrate how authorities are broadening their regulatory net to include traditionally less scrutinized sectors.

Sources

This report draws on statements from European Parliament members, disclosures by technology companies, and regulatory announcements from the EU's Anti-Money Laundering Authority. Information regarding enforcement actions against real estate and gambling companies comes from official regulator statements and industry compliance reports. The analysis of crypto money laundering methods is based on financial crime investigations published between 2022 and 2024.