Luxembourg raised the red flag against the misuse of encrypted currency companies. In the 2025 national risk assessment report, the country said that encryption companies were at a great risk to exploit by money laundering funds. The report comes at a time when the encryption sector shows gradual signs of expansion in the European nation, which is described as the richest country in the world. Many other countries have also sparked a similar encryption concern for the aforementioned in the NRA report.
NRA a report He said that virtual asset service providers (VASPS) were able to facilitate special transactions based on encryption at the international level, which made them greatly vulnerable to the exploitation of financial criminals.
“The use of encryption assets, especially with regard to investment fraud, has become more prevalent. Factors such as increasing the value of encryption assets and increasing interest in the media about encryption investments are factors that also contribute to the fixed boom in investment fraud.”
According to NRA, EUROPOL, the European Union Law Agency, has reported a rise in investment fraud and bitcoin cases to convert Stablecoin to add more privacy layers to transactions. In addition, the agency noted that the non -arriving encryption service providers who have insufficient KYC details, especially those located in the judicial states abroad, have become money laundering.
The NRA report also highlighted that human trafficking and migrant smugglers in the region were heavily dependent on cryptocurrencies to collect and transport illegal profits.
NRA added: “The major police confirm in their annual reports, which are increasingly facing unlawful banking activities, deception and investment fraud related to encryption assets.”
The report said that the lack of disclosure of its identity and the nature of nationalism of the origins of encryption hinders the investigation and the prosecution of these financial criminals, citing Europol.
Europol actually confirms that investment fraud generates millions of illegal profits
The encryption assets are still the most informed product of victims in this type of fraud. “
Luxembourg is among the founding members of the European Union, so its encryption sector is covered under MICA regulations. The country aims to increase alertness about illegal encryption activities now after Mika is also valid.
In 2022, Paypal chose Luxembourg as a point of entry into the encryption space in the European Union.
In January this year, Standard Chartered Bank also expanded encryption services to the European Union via Luxembourg.
