Cryptocurrency Regulations: In-Depth Understanding of AML and Counter-Fraud Measures (Year 2024)
In the ever-evolving world of cryptocurrency, money laundering remains a significant concern for businesses and regulatory bodies alike. As the landscape continues to shift, crypto companies are being urged to update their Anti-Money Laundering (AML) policies to tackle the emerging risks.
One of the key trends in 2025 is the increased use of cross-chain bridges, mixers/tumblers, and privacy-focused tokens to obscure the origins of illicit funds. Criminals are rapidly exploiting vulnerabilities in Decentralized Finance (DeFi) platforms and unregulated crypto exchanges, with stolen funds from services reaching record levels.
To address these evolving risks, businesses should enforce the Travel Rule and adhere to global crypto reporting frameworks like the OECD’s Crypto-Asset Reporting Framework (CARF). This ensures secure and transparent customer information sharing across jurisdictions.
Advanced blockchain analytics and smart contract monitoring tools are also crucial in detecting on-chain layering, mixing, and suspicious behavioral patterns in real time. Integrating real-time sanctions screening, especially for stablecoins and privacy coins, can help flag cross-border crypto flows that pose higher risks for laundering.
Public-private partnerships and international intelligence-sharing networks like the Egmont Group can accelerate investigations and compliance alignment. Businesses should also regularly assess and mitigate AML risks associated with unregulated or offshore crypto exchanges, DeFi platforms, and privacy-enhancing technologies.
Incorporating machine learning and AI techniques into AML programs can help keep pace with increasingly automated and disguised laundering schemes. Many organizations have yet to fully utilize these technologies, but they are proving to be invaluable in the fight against money laundering.
Unusual transactions, unusual transaction patterns, use of privacy coins, geographic anomalies involving high-risk jurisdictions, dealing with unregistered or unlicensed companies, inconsistent or false customer information, high-risk industries, transactions involving Politically Exposed Persons (PEPs), and transactions in sectors prone to money laundering are red flags of crypto money laundering.
The European Union's 5th and 6th AML Directives (5AMLD & 6AMLD) mandate that businesses strengthen fraud detection efforts in areas like identity theft, money laundering, and tax evasion. The crypto industry is a target for a variety of fraudulent schemes, which can be divided into two main categories: obtaining a digital wallet and crypto transfers.
Cryptocurrency fraud can be isolated crimes, such as stealing funds from a crypto wallet, or part of elaborate schemes aimed at concealing the origins of ill-gotten proceeds. To combat these threats, companies need specialized tools and strategies, and this is where Sumsub can play a key role in supporting fraud prevention and compliance.
References: 1. Cross-chain Bridges and Privacy Coins: The New Frontier for Crypto Money Laundering 2. The Evolution of Crypto Money Laundering in 2025: A Comprehensive Guide 3. Stolen Crypto Funds Reach Record Levels in 2025 4. The Impact of Scams on Crypto Money Laundering 5. The Role of Machine Learning and AI in AML Programs
- In the evolving landscape of crypto money laundering, the increased use of cross-chain bridges, mixers/tumblers, and privacy-focused tokens is a significant concern, as criminals swiftly exploit vulnerabilities in DeFi platforms and unregulated crypto exchanges.
- To protect against these emerging risks, businesses should enforce the Travel Rule, adhere to global crypto reporting frameworks like the OECD’s Crypto-Asset Reporting Framework (CARF), and integrate advanced blockchain analytics and smart contract monitoring tools for real-time suspicious behavior detection.
- International intelligence-sharing networks like the Egmont Group and public-private partnerships can aid in accelerating investigations and enforcing compliance, while regularly assessing and mitigating AML risks associated with unregulated or offshore crypto exchanges, DeFi platforms, and privacy-enhancing technologies is crucial.
- Machine learning and AI techniques can help businesses keep pace with automated, disguised laundering schemes, as they prove to be invaluable in the fight against money laundering. Unusual transactions, geographic anomalies, dealing with unregistered or unlicensed companies, false customer information, high-risk industries, transactions involving Politically Exposed Persons (PEPs), transactions in sectors prone to money laundering, and transactions with privacy coins are red flags.
){kind=link}