Yigit Taha OZTURK 
As the crypto industry evolves across Europe, regulators are tightening their grip. While the sector promises innovation and financial opportunity, growing scrutiny reveals the hidden risks beneath. Luxembourg’s newly released 2025 National Risk Assessment (NRA) makes this shift unmistakably clear.
VASPs Under Regulatory Scrutiny
In its 2025 NRA report, Luxembourg has classified Virtual Asset Service Providers (VASPs) as high-risk entities for money laundering. This risk is attributed to transaction volume, global client reach, legal structures, and the cross-border nature of crypto operations. The country had previously warned about the sector in its 2020 and 2022 reports, citing the digital and borderless characteristics of crypto assets as major vulnerabilities for financial crimes.
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The European Union is actively implementing the MiCA (Markets in Crypto-Assets) regulation to harmonize crypto laws across its 27 member states. Since January, crypto companies have begun obtaining licenses to operate legally. In May, Kraken launched regulated crypto derivatives trading, and Crypto.com secured a similar license. However, not all players comply—Tether (USDT) refused to align with MiCA’s rules and was consequently delisted from Binance, Coinbase, and Crypto.com across EU platforms.
Crypto’s Role in Money Laundering Grows
With crypto’s increasing role in global finance, it’s also becoming a tool for illicit activity. Earlier this month, Hong Kong authorities arrested 12 individuals for laundering $15 million using over 500 bank accounts and cryptocurrency. Meanwhile, in Europe, 17 suspects were detained in connection with a “mafia crypto bank” accused of laundering €21 million ($23.5 million). Authorities seized over $5 million in cash, crypto, firearms, and luxury vehicles during the crackdown.
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