Increase in Suspicious Cryptocurrency Activity in Germany
In a significant development, Germany’s Financial Intelligence Unit (FIU) has identified an unprecedented rise in suspicious activity linked to cryptocurrencies during the past year, according to its latest annual report published on Tuesday in Cologne. In 2024, the FIU received 8,711 reports related to crypto transactions, reflecting an 8.2% increase compared to the figures from the prior year as reported by Bloomberg.
This uptick is notable as it contrasts with a decline in overall suspicious activity reports (SARs), a situation attributed to recent regulatory changes implemented by the agency to eliminate unnecessary filings.
Predominant Cryptocurrencies and Their Use
The predominant cryptocurrencies associated with these reports were Bitcoin (BTC), Ethereum (ETH), Tether (USDT), and Litecoin (LTC), which were frequently involved in transactions on trading platforms, mixing services, and online gambling sites. The FIU pointed out that these types of transactions are often utilized to disguise the origin of illegally obtained funds, highlighting the expanding role that digital currencies play in money laundering operations.
Global Trends in Cryptocurrency Misuse
This trend in Germany aligns with a global pattern of increasing scrutiny regarding the misuse of cryptocurrencies for criminal activities. For instance, in the UK, the National Crime Agency noted that cryptocurrency exchanges accounted for 6.6% of all SARs filed in the period from 2023 to 2024, amid a slight rise in total filings that reached approximately 872,000.
The UK also experienced a noteworthy rise in reports relating to counter-terrorism financing and measures involving account freezes.
In the United States, the Financial Crimes Enforcement Network (FinCEN) registered over 8,600 crypto-related SARs in fiscal year 2023, a notable increase prompted by a specific advisory issued in September that resulted in weekly submissions climbing to as many as 1,560. Overall, U.S. entities aggregated 4.6 million SARs throughout the year.
Magnitude of Money Laundering Involving Cryptocurrencies
Globally, the magnitude of money laundering involving cryptocurrencies remains considerable. Data from Chainalysis indicated that laundered cryptocurrency volumes reached $31.5 billion in 2022, followed by a decline to $22.2 billion in 2023. However, these figures still surpass the volume levels recorded before the cryptocurrency market surge in 2021.
Chainalysis also reported that, while the total volume of crypto transactions decreased by 15% in 2023, laundered crypto volume dropped around 30%. It is challenging to ascertain if this indicates a positive shift, as the overall illicit use of cryptocurrencies has remained stable, estimated at about $50 billion annually for the years 2022, 2023, and 2024.
