Skip to main content

EU Warns Malta of the Dangers of Ignoring Money Laundering

Having attracted millions in crypto money to its island, Malta has been taking steps to limit the risk of crypto crimes.
Malta and money laundering

Malta has been advised to step up its Anti-Money Laundering (AML) enforcement just as it's growing its crypto and gaming sector. The European Union believes the island needs to increase its AML policing meet the demands of its ever-growing fintech industries. European Commission made these comments in its recommendations to member states on the utilization of EU funds, Malta Todayreports.

Known as the Blockchain Island, Malta has quickly warmed the hearts of crypto businesses through its favorable crypto laws. The island passed some friendly bills last year and has since seen crypto giants like Binance and OKCoin open shop there. The bills covered the registration and certification of service providers, as well as the regulation of Initial Coin Offerings (ICOs.)

Managing Risk

The commission lauded the island nation's resolve to increase budgetary allocations to its Financial Intelligence Analysis Unit. It said that “the enhancement of its procedures and processes are positive steps.” Following this pat on the back came some stern advice from the commission.

“Governance shortcomings, particularly in the fight against corruption, may also adversely affect the business environment and weigh negatively on investment. In particular, there is a risk of conflict of interest at various levels of government.”

Malta has attracted millions in crypto money to its island. Now it is taking steps to limit the risk of crypto crimes. Earlier this year, the Malta Financial Services Authority (MFSA) partnered with crypto security firm CipherTrace to identify and prevent crypto crime. The MFSA would integrate CipherTrace's Compliance Monitoring tool to estimate transactional risks on suspicious addresses and wallets.

“Being strongly aware of the money laundering and financing of terrorism risks associated with entities operating in this sphere, the decision has been taken to engage the services of CipherTrace in order to reduce fraud and detect transactions with illegal sources of funds,” MFSA CEO Joseph Cuschieri stated.