Crypto Anti-Money Laundering: International Regulation and Increasingly Strict Information Disclosure Obligations

Author: TaxDAO

In the global financial environment, with the popularity of cryptocurrencies such as Bitcoin and Ethereum, money laundering activities have shown new characteristics and trends. In order to meet these challenges, international organizations, regional institutions and governments are strengthening and improving anti-money laundering systems to combat money laundering and related illegal and criminal activities and ensure the security of the financial system. This article will summarize and analyze the basic concepts, challenges, international rules and regulatory practices of the crypto asset anti-money laundering system in the EU and the United States.  

1. Overview of the Anti-Money Laundering System 

1.1 Anti-Money Laundering System 

Money laundering refers to the processing of illegally obtained funds or assets through financial or commercial means to make them appear legal. The purpose of this is to make these illegal gains appear legal in appearance, so that criminals can use these funds without restriction. Money laundering is not only related to criminal activities such as drug trafficking, fraud, and embezzlement, but is also closely linked to terrorist financing, corruption, and tax evasion. It has caused serious damage to the economy and society, undermined the stability of the financial system, encouraged criminal activities, and weakened the government's ability to control the economy. Therefore, governments around the world are implementing strict anti-money laundering measures to combat this behavior. The anti-money laundering system is a set of laws, regulations, and measures designed to prevent and combat illegal money laundering. The anti-money laundering system includes two major parts: internal and external systems. In terms of internal systems, financial institutions need to establish an anti-money laundering risk compliance department, establish a sound anti-money laundering control mechanism, ensure that anti-money laundering measures are effectively implemented, and regularly self-assess anti-money laundering risks. In terms of external systems, financial institutions generally need to assume obligations such as customer due diligence, monitoring and reporting of suspicious transactions, and strictly abide by the anti-money laundering laws and regulations of international organizations and various countries. 1.2 Anti-money laundering system 1.2.1 International standards and institutions Founded in 1989, the Financial Action Task Force on Money Laundering (FATF) is the most influential and authoritative standard-setting organization for anti-money laundering and counter-terrorist financing in the world. FATF provides framework standards for anti-money laundering and counter-terrorist financing through the Forty Recommendations and the IX Special Recommendations. Its recommendations cover financial institutions and non-financial institutions, and put forward specific requirements for relevant departments from national legislation, law enforcement to supervision, international cooperation and financial sanctions, including verifying customer identity, recording and reporting suspicious transactions, and keeping transaction records. At the same time, FATF promotes the development of anti-money laundering systems in various countries by setting higher evaluation standards and strict mutual evaluation procedures.  

The United Nations formulated the Palermo Convention and the United Nations Convention against Corruption in 2000 and 2003 respectively to establish an effective international cooperation mechanism and promote global anti-money laundering cooperation. At the same time, the International Monetary Fund (IMF) and the World Bank also assist member countries in strengthening anti-money laundering and anti-terrorist financing mechanisms through technical assistance and financial supervision.  

1.2.2 Regional organizations 

The European Union (EU), the Asia-Pacific Anti-Money Laundering Group (APG), and the Middle East and North Africa Financial Action Task Force (MENAFATF) are anti-money laundering cooperation organizations currently established in various regions. At present, China is one of the 41 member jurisdictions of the APG, and the organization also includes observer jurisdictions such as the United Kingdom and Germany, as well as observer international organizations such as the World Bank, the Asia-Pacific Economic Cooperation Organization, and the European Commission. MENAFATF is similar to the APG structure. It is a FATF-style regional organization with 21 member states, 6 observer regions, and 12 observer international organizations. The anti-money laundering actions of EU member states are based on the original structure to formulate new regulatory regulations.  

Regional organizations have certain connections with international organizations. For example, APG is an associate member of the FATF working group, and members of the group will attend FATF meetings as representatives of APG. Each organization will carry out its work in accordance with FATF standards and conduct regional mutual evaluations. MENAFATF also stated that its establishment was in response to the anti-money laundering recommendations of international organizations such as the FATF's "Forty Recommendations".  

1.2.3 National-level system 

Each country controls the flow of funds at the execution level through laws and regulations, financial intelligence units, and supervision and law enforcement, and combats money laundering crimes through various administrative departments. For example, in China, money laundering is included in the criminal legal system, and individuals who commit money laundering crimes may be sentenced to fixed-term imprisonment and fines. The United States, on the other hand, has adopted laws such as the Bank Secrecy Act to impose strict requirements on the due diligence procedures of financial institutions and information sharing with the government, so that the government can pay attention to any suspicious transactions in a timely manner and deal with them accordingly. 2. Challenges of Crypto Assets to Anti-Money Laundering Systems 2.1 Anonymity of Crypto Assets Cryptocurrency transactions are anonymous. Although each transaction is recorded on the blockchain, it is difficult to determine the true identity of the two parties to the transaction. Account information is identified by an encrypted digital code. When virtual assets are transferred between different addresses, it is difficult to link one address to other addresses, and it is also difficult to link the code to the characteristics of the person behind it, except for the transaction address information. This anonymity makes it easier for money launderers to hide their identities and sources of funds. Therefore, virtual assets are very likely to be used as a tool for money laundering. In particular, technologies such as coin mixers can make it difficult to track the flow of specific funds by mixing transactions of multiple users. Money launderers can more easily hide the source and purpose of funds, which brings higher money laundering risks to crypto assets. Related cases will be presented in detail later. 2.2 Rapid liquidity and borderlessness of crypto assets Through the Internet or virtual trading platforms, virtual assets can be transferred between different accounts around the world at will, and can also be used for payment or purchase of services anytime and anywhere, and such transfers and payments can usually be completed in a very short time. Therefore, monitoring and freezing money laundering funds have become more complicated and difficult. At the same time, virtual assets can rely on financial infrastructure distributed in multiple countries to complete cross-border transfers. Due to different anti-money laundering laws for virtual assets in different countries, if the components of the virtual asset system are located in a jurisdiction with weak anti-money laundering legal mechanisms, it will greatly facilitate money laundering.  

2.3 Convertibility of Crypto Assets 

In most countries and regions, virtual assets can be exchanged with legal currencies in the real world. For example, funds can be transferred into or out of the virtual asset network system through various payment methods, including cash, fund remittance companies, bank wire transfers, credit cards, etc. At this time, different assets can be converted through cryptocurrencies, making unregulated fund transfers convenient and feasible. Although the exchange of crypto assets may be strictly regulated in some countries, this only increases the cost of exchange behavior, and cannot fundamentally restrict exchange behavior in the gray area.  

2.4 Decentralized Management 

Crypto-asset transactions are mostly conducted through decentralized exchanges (DEX). In a decentralized model, no single entity can be required to perform "Know Your Customer" (KYC) or report suspicious transactions. Therefore, users can transfer funds between different jurisdictions to circumvent regulation, making supervision difficult.  

2.5 Irreversibility of Crypto-asset Transactions 

Once a virtual asset transaction is concluded, the triggered contract will be automatically executed and written into the blockchain. The immutability of blockchain technology gives virtual asset transactions the characteristics of irreversibility or reversibility. Electronic currency systems managed by governments and other official entities can provide customers with the function of revoking transfers when disputes arise in transactions. In contrast, the irrevocability of crypto asset transactions has caused trouble in the pursuit and recovery of virtual criminal assets.  

3. International Anti-Money Laundering Rules for Crypto Assets 

3.1 Major International Organizations 

3.1.1 Financial Task Force (FATF) 

Internationally, many relevant organizations provide advice and supervision on money laundering involving crypto assets, among which the Financial Task Force (FATF) is the main responsible party. As the most important anti-money laundering and anti-terrorism organization in the world, FATF has continuously revised and developed, and revised Article 15 of the "Forty Recommendations", adding clear definitions of "virtual assets" (VA) and "virtual asset service providers" (VASPs) to form internationally unified terms. Later, on this basis, the "VA and VASPs Guidelines" (also known as the "Updated Guidance for a Risk-Based Approach to Virtual Assets and Virtual Asset Service Providers", etc. were published, requiring member countries to effectively regulate virtual asset-related fields and ensure compliance with anti-money laundering (AML) and counter-terrorism financing (CFT) standards. 3.1.2 International Monetary Fund (IMF) The IMF has helped formulate anti-money laundering (AML), counter-terrorism financing (CFT) and non-proliferation financing policies internationally and within the legal systems of its member countries. The IMF expanded its AML/CFT work in 2000 and extended it to combating the financing of terrorism after the September 11, 2001 terrorist attacks. In 2004, the IMF’s Executive Board agreed to make AML/CFT assessments and capacity building part of the Fund’s regular work. In 2018, as part of its five-year policy review cycle, the IMF’s Executive Board reviewed the IMF’s AML/CFT strategy and provided strategic guidance for future work. The IMF conducts bilateral (or multilateral) surveillance by visiting its member countries, analyzing the impact of its policies on neighboring countries and the global economy, and publishing regular reports on these trends and analyses to assess countries’ compliance with international AML/CFT standards and help them develop programs to address deficiencies. The IMF also considers AML/CFT in other work, including the Financial Sector Assessment Program (FSAP). In some cases, it will also include anti-money laundering/combating the financing of terrorism in the IMF's loan program, and carry out anti-money laundering/combating the financing of terrorism assessments and capacity building activities with member countries. 3.2 Interpretation of international anti-money laundering rules and measures 3.2.1 Interpretation of FATF related rules FATF's recommendations on anti-money laundering supervision of crypto assets are regarded as a weather vane for anti-money laundering laws of crypto assets in various countries. After it formulated international standards for virtual assets and virtual asset service providers, various countries have successively introduced new legal systems and developed relevant technologies to solve the lack of virtual currency supervision. The organization has adopted traditional anti-money laundering rules and transformed them for application. FATF has expanded traditional anti-money laundering laws to virtual assets. Virtual assets are subject to current laws and systems related to anti-money laundering. In order to prevent the abuse of virtual assets in money laundering, terrorist financing and financing expansion, FATF recommends that the crime of money laundering should be extended to any type of property, and countries should extend their applicable money laundering crime measures to criminal proceeds involving virtual assets; confiscation and provisional measures, freezing measures, economic sanctions, etc. are applicable to virtual assets; countries should also maintain statistical data on virtual assets frozen, seized and confiscated by competent authorities, regardless of how virtual assets are classified according to their property laws; countries should also impose a series of effective, appropriate and dissuasive civil, administrative or criminal sanctions on VASPs or their directors and senior executives who fail to comply with their anti-money laundering and anti-terrorist financing (AML/CFT) requirements. " 

In the FATF's "Guidelines", FATF stated: Almost all FATF recommendations are directly or indirectly related to the money laundering risks of virtual asset service providers, which also means that virtual asset service providers (VASPs) should comply with the same anti-money laundering and anti-terrorist financing obligations as "financial institutions" and "designated non-financial businesses and professions". At the same time, FATF has also updated the traditional system in response to the situation of virtual assets. Among the anti-money laundering measures, some of the content is an update of the "Forty Recommendations". One of the regulations that FATF attaches the most importance to is the "Travel Rule". Its content is: the initiators and beneficiaries of all virtual asset transfers must exchange identification information and must ensure the accuracy of their information. This rule will apply to all VASPs, financial institutions and obligated entities. This rule is transformed from Article 16 "Wire Transfer Rules" in the "Forty Recommendations", which stipulates the integrity of the information chain during the wire transfer process, requires financial institutions to supervise it and have the right to take freezing measures. After the review in 2021, the application of the Travel Rule has been extended to a range of new cryptocurrency products and services, including private crypto wallets, non-fungible tokens (NFTs) and decentralized finance (DeFi).  

3.2.2 Interpretation of relevant IMF measures 

The mission of the IMF is to promote international monetary cooperation, promote the development of international trade, promote sustainable economic growth and provide assistance to members facing international balance of payments difficulties. Based on this, the IMF, with the macro perspective of international organizations, has played a role in clarifying international standards for anti-money laundering of crypto assets, promoting international cooperation through bilateral (or multilateral) supervision, and developing emerging technical means.  

The IMF supports FATF's standards for anti-money laundering of crypto assets and can evaluate the AML/CFT compliance of various countries in combination with the Financial Sector Assessment Program (FSAP). Its rules do not involve anti-money laundering policies for crypto assets, but focus on ensuring the implementation of international standards through supervision, assessing the anti-money laundering risks of various countries and proposing improvement suggestions, and disclosing the compliance risks of various countries in the assessment report, strengthening the sharing of risk information and transparency among countries, and promoting healthier international cooperation. These measures can also reduce the money laundering risks brought by crypto assets to a certain extent. At the same time, with the development of crypto assets and decentralized finance (DeFi), anti-money laundering technology also needs corresponding progress and improvement. The IMF promptly identifies new money laundering risks from a macro perspective, conducts research reports on various risks, and provides strategic guidance and technical support for future anti-money laundering actions.  

4. EU and US Anti-money Laundering Rules for Crypto Assets 

4.1 EU 

4.1.1 Overview of EU Crypto Asset Market Regulation Act (MiCA) 

In the past two years, Europe has gradually promoted anti-money laundering legislation for crypto assets, and its achievements are mainly reflected in the Markets in Crypto Assets Regulation bill (MiCA) officially implemented this year (2024). The regulations require companies that issue and trade crypto assets, tokenized assets and stablecoins in the 27 EU countries to obtain corresponding licenses and require stablecoin issuers to hold appropriate reserves. At the EU level, the regulatory agencies of the bill are the European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA), while member states designate responsible agencies. The regulation makes the EU the first major jurisdiction in the world to have a crypto licensing system. Its implementation of relevant measures makes the transactions of crypto assets easier to track, thereby combating tax evasion and money laundering. With the collapse of leading cryptocurrency exchanges such as FTX, crypto hedge fund Alameda Research, and cryptocurrency lending platform BlockFi, and the frequent collapse of the crypto market, the EU hopes to stabilize financial risks and protect the market and consumers through strict rules and supervision.  

4.1.2 MiCA's regulatory token types 

Based on whether crypto assets need to anchor the value of other assets, MiCA classifies crypto assets into electronic money tokens (EMT), asset-reference tokens (ART) and other tokens: a. EMT, i.e. electronic money, is designed to anchor its value by referring only to one official currency and is an electronic substitute for coins or banknotes. b. ART is designed to anchor its value by referencing any other value or right or a combination thereof, including one or several official currencies. ART covers all other crypto assets backed by assets other than electronic money. For example, stablecoins USDT and USDC backed by US dollars, government bonds, etc.  

Electronic money (EMT) and asset reference tokens (ART) are the main objects of EU regulation at present; and because the information structure of decentralized finance (DeFi) is different from traditional finance, NFT is unique and non-fungible, and MiCA has not yet included them in the regulatory regulations.  

4.1.3 Regulatory requirements for classification of crypto assets 

For electronic money (EMT) issuers, MiCA has the following requirements: Electronic money issuers must 1) obtain official permission; 2) publicly publish white papers and marketing information on the website and be responsible for any false publicity; 3) comply with the market rules of issuance and redemption; 4) issue tokens at face value when the amount is received, and allow holders to redeem tokens at face value at any time; 5) open a separate account in a credit institution and invest the funds received in assets of the same currency, high security and low risk.  

For the Asset Reference Token (ART), its issuer must be 1) a legal person authorized by the European Union or its country or an entity company within the European Union; 2) a credit institution that holds a crypto asset white paper licensed by national authorities; 3) holders can redeem ART at any time at market value; 4) publicly publish white papers and marketing information on the website and be responsible for any false content and false propaganda; 5) establish and maintain effective and transparent procedures; 6) always maintain sufficient asset reserves to cover liabilities to token holders.  

4.1.4 European Banking Authority (EBA) 

When the holders, value or transaction volume of tokens reach a certain level, and when the transaction has a high risk of money laundering, terrorism, etc., or involves technologies such as private wallets and mixers, the transaction will be taken over by the European Banking Authority (EBA). At this time, the EBA will conduct additional supervision, such as detecting the source and destination information of crypto assets through distributed ledger technology (DLT).  

In July 2024, the European Banking Authority (EBA) issued the Travel Rules Guidelines, which are expected to take effect on December 30, 2024. The Travel Rule Guidance specifies in detail the information that must be carried with the transfer of funds and crypto-assets, requiring payment service providers (PSPs), intermediate payment service providers (IPSPs), crypto-asset service providers (CASPs) and intermediate crypto-asset service providers (ICASPs) to collect and verify information about senders and beneficiaries of the crypto-asset transfers they perform, through specific procedures to detect and manage missing or incomplete information, and to always be aware of risks associated with money laundering (ML) or terrorist financing (TF). 4.1.5 Transfer of Funds Regulation (TFR) Compared to MiCA, the Transfer of Funds Regulation (TFR) provides more targeted requirements for anti-money laundering actions for crypto-assets. On May 7, 2020, in the communication of the action plan, the EU stated that the scope of regulation should be expanded to the field of crypto asset service provision, and specific measures include establishing a coherent regulatory framework for the system within the EU to obtain more detailed and coordinated rules, especially to address the impact of technological innovation and the development of international standards, and to avoid differences in the implementation of existing rules. TFR stipulates that crypto asset service providers shall attach information about the initiator and beneficiary when transferring crypto assets to ensure the transmission of information in the crypto asset payment chain. According to the 16th recommendation of FATF on wire transfers, the EU's anti-money laundering policy on crypto assets, the Fund Transfer Regulation (TFR) stipulates that: in the absence of personal identification information, no amount of cryptocurrency is allowed to be transferred between accounts on its crypto asset service provider (CASP). This is a migration of the Travel Rule in the FATF's "Guidelines for VA and VASPs": when a customer of an exchange transfers money to a non-custodial crypto wallet, if the transfer amount exceeds 1,000 euros, it is necessary to verify that the wallet belongs to the customer.  

In the revision of the Funds Transfer Regulation, the EU imposed travel rule requirements on Crypto Asset Service Providers (CASPs), requiring them to be able to track the transfer of crypto assets. However, the bill has received mixed reviews from the public, with people worried that collecting personal identity data may not necessarily help combat money laundering, and that the TRF violates the EU Charter on Privacy.  

4.2 United States 

4.2.1 US Crypto Asset Anti-Money Laundering Case - Helix Mixer Case 

The US crypto asset market also faces "anti-money laundering" challenges. In 2021, Helix Bitcoin mixer, operated by Gary Harmon and Larry Harmon, was accused of serving users of darknet markets (such as Alpha Bay) to provide anonymity and cover up the flow of funds for illegal transactions. These illegal transactions include transactions of drugs, guns and other illegal goods. According to the investigation, Helix laundered more than $354 million worth of Bitcoin, and Larry Harmon was arrested for this, and 4,400 Bitcoins worth about $200 million were confiscated. The act of operating a remittance business without a license also attracted charges from the U.S. Department of Justice; the Financial Crimes Enforcement Network (FinCEN) accused Larry Harmon of violating the Bank Secrecy Act, for which he faced a high fine of up to $60 million. In 2021, Larry pleaded guilty to the charge of "conspiracy to launder money tools", and the remaining charges were dropped in exchange for his cooperation. He has now reached a cooperation agreement with the government and can only use the Internet under direct supervision. When Larry’s brother, Gary Harmon, discovered that the government was trying to recover and seize the bitcoins stored on the device, he attempted to use Larry’s credentials to recreate the bitcoin wallet stored on the device and secretly transferred more than 712 bitcoins (worth about $4.8 million at the time) to his own wallet, which he then further laundered through two online bitcoin mixing services, using the laundered bitcoins to make large purchases. After the operation was uncovered, Gary agreed to give up the cryptocurrency and other property obtained from the fraud, with a total value of more than $20 million that could be confiscated. In this case, the “coin mixer” that emerged with the birth of virtual assets is an important tool for illegal money laundering, bringing new challenges to law enforcement agencies. Coin mixers are a service that provides anonymity by disrupting the chain of money flow. The principle is to mix the cryptocurrencies of different users and then redistribute the mixed cryptocurrencies to each user, making it difficult for external observers to track the source and destination of cryptocurrencies, enhancing the "anonymity" of crypto assets and increasing the difficulty for regulatory agencies to monitor crypto assets. 4.2.2 Anti-money laundering supervision measures for crypto assets in the United States Anti-money laundering supervision of crypto assets in the United States is mainly implemented by the Financial Crimes Enforcement Agency (FinCEN) to ensure the security and compliance of its financial system. The United States has passed a number of laws and regulations related to cryptocurrencies, the most important of which is the Bank Secrecy Act (BSA) cited in the above case when Larry was finally sentenced. The BSA requires financial institutions, casinos and other businesses to monitor customer behavior, report large transactions and record specific transactions. For example, when cash transactions exceed $10,000, they must be reported and recorded (called Currency Transaction Report, CTR). However, for crypto assets, the threshold is stricter, and any mixing transactions should be reported immediately, regardless of the amount. In addition, banks should also pay attention to record any suspected violations of federal law (Suspicious Activity Report, SAR) and monitor customer behavior at any time. At the same time, banks also have a duty to keep customers' private information confidential to prevent identity theft and financial loss. At the same time, the supervision of crypto asset trading platforms is also one of the means of anti-money laundering. In the Helix mixing case, Larry Harmon's trading platform was not legally registered, which violated relevant regulations, thus making Larry Harmon another crime. In the United States, crypto asset trading platforms are generally regarded as money services businesses (MSBs) and are regulated by the Financial Crimes Enforcement Network (FinCEN). According to FinCEN regulations, these platforms must comply with anti-money laundering (AML) and know your customer (KYC) legal requirements. At the same time, the U.S. Department of Justice proposed that Helix mixers were suspected of "operating an unlicensed remittance business." This accusation implies how the legal level of supervision of crypto asset trading platforms can restrict illegal money laundering. According to FinCEN regulations, cryptocurrency trading platforms are considered money service businesses (MSBs) and must register with FinCEN and comply with AML and KYC regulations, including customer identity verification, record keeping, and suspicious activity reporting. If the cryptocurrency provided by the platform is considered a security, then the platform may need to register with the Securities and Exchange Commission (SEC) and comply with federal securities laws. The SEC focuses on protecting investors and ensuring the transparency and fairness of trading platforms. For platforms that provide cryptocurrency derivatives trading, such as futures and options, they need to register with the Commodity Futures Trading Commission (CFTC) and comply with the provisions of the Commodity Exchange Act. In some states, crypto asset trading platforms have stricter regulations. These compliance checks further promote anti-money laundering actions.  

4.2.3 Anti-money laundering risks of crypto assets in the United States 

However, there are still some risks and problems in the anti-money laundering supervision of crypto assets.  

On the one hand, there is the risk of peer-to-peer conversion: Peer-to-peer transactions are different from conversions facilitated by cryptocurrency service providers. They are conversions from cryptocurrency to legal currency. In this process, individuals or entities directly exchange cryptocurrency for legal currency, directly exchange cryptocurrency by sharing wallet information, and exchange corresponding legal currency through traditional bank transfers (e.g., cash exchange, wire transfer, automatic clearing house transfer, etc.). The legal currency transfer itself looks no different from other forms of transactions between two parties. Only by querying or monitoring abnormal transaction patterns can the connection between the transaction and cryptocurrency be discovered. In addition, crypto asset holders use crypto wallets to conduct transactions, and this process completely bypasses the supervision of financial institutions, and the risk of falsification of registration information is high (such as Gary Harmon using his brother's credentials to register a wallet and transfer Bitcoin in the previous article). On the other hand, the KYC system is also difficult to implement. The rule requires cryptocurrency service providers to send customer data, including name and account number, to financial institutions when transferring funds. However, due to the lack of sufficient information provided by the existing infrastructure of cryptocurrency service providers and the lack of consensus among institutions in the governance of information sharing processes, the KYC rule has certain implementation difficulties. For financial institutions, in order to obtain KYC information, they need to understand the business content, customer groups and sources of funds of cryptocurrency service providers, and require cryptocurrency service providers to collect and provide customer information. However, it is difficult to identify that a customer has a deposit relationship with a cryptocurrency service provider - they may have multiple legal currency transactions, but cryptocurrency transactions are not frequent, so from the beginning, it is difficult for financial institutions to identify the identity of their cryptocurrency service providers. This has further led to the Helix mixer and other coin mixers being able to conduct unlicensed remittance business under supervision.  

A dual-perspective review system - transaction review and audit clues obtained through blockchain technology - may be a way to minimize these risks. However, blockchain review is still limited to specific chains and is subject to certain technical limitations. If a comprehensive review system is to be formed, technological progress and system improvement are still needed.  

5. Summary and Prospects of Anti-Money Laundering System for Crypto Assets 

The anti-money laundering system for crypto assets is still in its early stages of establishment and will be gradually improved in the future. Its improvement mainly depends on the expansion and updating of the anti-money laundering legal system in traditional finance. However, the barriers brought by crypto assets at the technical level may be difficult to effectively deal with through traditional anti-money laundering means. The anti-money laundering system for crypto assets is a field that is constantly developing and adapting to new challenges. With the evolution of technology and the strengthening of global cooperation, regulators need to take more effective measures to combat money laundering activities using crypto assets. In the future, it is expected that more international standards and cooperation mechanisms will be introduced to promote anti-money laundering work on a global scale. At the same time, regulators also need to find a balance between protecting consumer rights, promoting financial innovation and preventing financial risks. With a deeper understanding of the nature and risks of crypto assets, the anti-money laundering system will be more precise and efficient, contributing to maintaining global financial stability.