Crypto-related anti-money laundering reports rose by 8% in Germany last year: FIU

Anti-money laundry practices with regard to involved cryptocurrencies According to the annual report of the German Financial Intelligence Unit (FIU), 8.2% rose in Germany last year.

The total crypto-related reports climbed from 8,049 in 2023 to hit 8,711, good for a record of 3.3% of all suspicious activity reports (SARS) submitted to the FIU, the agency responsible for combating money laundering in Germany.

The total figure marks an increase of 23.6% since 2020, with Bitcoin predominant in the vast majority of last year’s reports, followed by Ethereum” XRP” Connect And Litecoin.

According to the FIU, credit institutions and banks have submitted more than 6,000 of the crypto-related reports, which generally referred to transactions to or from trading platforms, mixed services and gambling sites.

And for the analysts of the agency, this domination of lenders is a sign that “traditional financial players have long become important observers of crypto-based risks.”

The FIU interprets growth in crypto-related AML reports as a sign that financial crime quickly adapts to new innovations, and that cryptocurrencies have become an important part of complex and international money laundering structures.

“The underlying mechanisms often escape traditional operating systems and require advanced analytical approaches,” the report explains.

As an example, the report offers details about one money laundering case involving a network of private individuals and channels, with a study that includes a large part of 2024, which shows that the most important participant used 44 bank accounts and eight crypto-trade accounts.

In view of such a complexity, the FIU concludes the crypto-oriented part of its report by confirming that “dealing with complex money laundering structures requires a coordinated approach of all parties involved”, and that the rapid evolution of new money laundering of washing requires a comparable rapid development of new analysis and research techniques.

Financial crime on the rise

For experts who work in the field of AML, the record figures in Germany not only arise from the growth in acceptance of cryptocurrency worldwide, but also of the growth of financial crime in general.

“The additional of Germany in crypto-related suspicious activity reports is driven by the combination of those two trends” Decrypt.

According to Schweiger, digital assets are becoming increasingly attractive for potential money laundering because it is easier for them to hide money flows on a digital ledger, with detection mechanisms that have difficulty keeping up with the pace of change.

“Digital ledger technology is still relatively new and financial institutions are upgrading their anti-money laundering processes and tools to tackle this development,” he explains.

Nevertheless, he suggests that the MICA regulation of the EU will play an always vital role in this context, which helps financial companies and must ensure that their KYC measures are sufficiently robust.

And because detection and reporting measures will improve, Schweiger expects that Germany and other countries will continue to see an increase in crypto-related suspect activity reports “in the coming years”, in addition to an increase in reports with regard to Fiat currency transactions.

“With the approval of more AI-driven detection tools, financial institutions and supervisors will be able to better identify illegal activities that have gone unnoticed,” he says.

In the ideal case, Schweiger would like to see a shift in the short term from reactive report to “proactive risk reduction”, which would include the emphasis on real -time analyzes and data exchange between institutions and authorities.

He concludes: “To effectively combat financial crime in the era of Crypto, consistency and technology implementation will be essential.”