Crypto Service Provider Flagged by FIC as High Money Laundering & Terror Risk

1 Apr

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The Financial Intelligence Centre (FIC) has released its 2025 Sector Risk Assessment (SRA) for Crypto Asset Service Providers (CASPs) — and the message is clear: the sector faces high risks of money laundering (ML) and terrorist financing (TF). If any of your clients fall within the CASP category, this will have an impact on them.

👥 Who Are CASPs?

CASPs include businesses that:

Exchange crypto for money or other crypto,
Transfer or store crypto,
Offer crypto investment or advisory services.

CASPs must register with the FIC as accountable institutions, report suspicious transactions, and comply with legislative requirements.

🔍 Key Risks Identified

The FIC highlights the following high-risk areas:

Products: Crypto is used to hide illicit funds via mixers, privacy coins, and offshore exchanges.
Clients: Anonymous wallets, shell companies, and politically exposed persons pose major risks.
Transactions: Large, complex, or cross-border payments are red flags.
Channels: Online-only onboarding increases fraud risk.
Geographies: Links to high-risk or sanctioned countries raise concerns.
Terror financing: Crypto is used to fund terrorism and weapons programmes.

🛡️ How CASPs Can Reduce Their Risk

The FIC recommends that CASPs and their compliance teams:

Strengthen KYC: Properly identify and verify customers and their source of funds.
Use blockchain analytics: Monitor wallet activity and flag unusual behaviour.
Apply a risk-based approach: Prioritise resources toward higher-risk clients and transactions.
Comply with reporting duties: File STRs and threshold reports as required.
Check against sanctions lists: Avoid dealing with listed entities or wallets.

✅ Bottom Line

Crypto businesses are now firmly in the regulatory spotlight. Accountants and compliance officers must ensure that CASPs meet their FIC obligations — or face penalties and possible sanctions.

Read the FIC Media Release for further details.