Luxembourg Tightens Cryptocurrency Regulations, Classifying VASP as High-Risk for Money Laundering

The Grand Duchy of Luxembourg has classified virtual asset service providers (VASPs) as high-risk in its 2025 National Risk Assessment, signaling heightened scrutiny and increased regulatory pressure on the crypto sector. This classification follows similar assessments from 2020 and 2022, highlighting ongoing concerns about the vulnerability of VASPs to money laundering and terrorism financing. Luxembourg’s decision reflects a broader global trend as countries strive to combat illicit activity in the rapidly expanding cryptocurrency space.