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With rising scams, the government regulators are making a move on illegal and fraudulent crypto exchanges. 

The Swedish Police Authority of Financial Intelligence Unit (FIU) released a report that identified certain crypto exchanges as “professional money launderers (PML)” after analyzing their operations. 

Sweden’s FIU states the illicit crypto exchange often possesses expertise within the criminal economy and functions as an “enabler.” One of the illicit activities that the illegal crypto exchanges promote is money laundering, where the fraudsters often convert “criminal proceedings” into crypto assets. 

According to the report, it states, “The reason for criminals to instead turn to an illicit and unlicensed crypto exchange provider can be the need for anonymity, avoidance of controls, lack of knowhow, or the need to exchange between cash and cryptocurrency.”

The Swedish regulator described them as providers that offer crypto exchange services on behalf of criminals." Additionally, the FIU further categorized the crypto exchange service into four categories: the Node Exchange Provider, the Hawala Exchange Provider, the Asset Exchange Provider, and the Platform exchange provider.

The PMLs are categorized based on how the crypto service providers operate, their criminal range, and their criminal client base. The regulator also warned law enforcement to steadily increase its presence on “different platforms used for crypto exchange in order to identify and map illicit crypto exchange providers.”

“Since the entire crypto arena has an international scope, it must be a necessity for law enforcement agencies to conduct joint international operations, involving agencies in- and outside the EU, in order to share vital data and gain important synergies.”