2025 NRA Reveals Fraud, Crypto, and AI Incite UK’s Money Laundering Risk

The UK government has issued the 2025  National Risk Assessment (NRA), jointly published by HM Treasury and the Home Office.

According to the 2025 NRA, the UK  continues to face a high threat of money laundering (ML) and terrorist financing (TF).

Money laundering remains a significant concern in the UK, with illicit cash flows exceeding £12 billion annually. The 2025 NRA highlights the use of cash-intensive businesses such as car washes, barbershops, and convenience stores in ML.

The 2024 Economic Crime Survey highlighted that one in 43 UK businesses experienced known or suspected money laundering activity in the past 12 months.

Significant Findings of the 2025 NRA

With the growing use of AI technology and adoption of cryptocurrency, the UK financial system is getting more vulnerable to criminal activities, which are using innovative tools to bypass AML laws. According to the FCA YouGov survey of 2024, 12% of UK adults owned cryptocurrencies. Although digital currency is not illegal, due to peer-to-peer and anonymous transactions, it increases the risks of money laundering.

The 2025 NRA also notes the convergence of money laundering, kleptocracy, and sanctions evasion. In the wake of Russia’s invasion of Ukraine, sanctioned entities and individuals have turned to sophisticated laundering networks.

Operation Machinize in 2025 exposed several barbershops used as fronts for illicit financial activity. Officers seized more than £40,000 in cash, some 200,000 cigarettes, 7,000 packs of tobacco, and over 8,000 illegal vapes.

Although there has been a reduction in the use of cash for everyday payments, cash-based laundering still remains high in the UK.  Criminals utilize traditional mechanisms such as cash smuggling, money mules, and exploit the Post Office’s everyday banking service. They outsource laundering to third parties who have the expertise to disguise the nature of funds to avoid detection. However, they are rarely involved in generating or processing funds for illicit activities. They are professional enablers who provide services that facilitate criminals,  mainly including lawyers, accountants, trusts, and company service providers.

In addition, the UK is a leading fintech hub, with firms such as electronic money institutions and payment service providers that are now widely integrated into its financial system. This expanded access to digital payments increases criminals’ ability to hide in plain sight, which has driven the risk.

Read More: 

• The UK Raises Money Laundering Threshold from £1,000 to £3,000
• Key Insights from HM Treasury 2023-2024 AML/CTF Supervision Report
• Lithuania Fines UK Fintech Revolut a Record Fine of €3.5 Million for AML Failings

Key Highlights of 2025 NRA

This report highlights that criminals utilize lawful corporate structures such as trusts as a channel for money laundering. These legal arrangements are significant to conceal the origin and destination of funds, to make them appear legitimate.

Fraud is the most common crime in the UK, now accounting for 43% of all crime in England and Wales, with an estimated 4.1 million incidents in 2024, which is 33% higher than in 2023. It continues to be the leading predicate offence, followed by drug trafficking, sanction evasion, tax evasion, and cybercrime.

On the terrorist financing (TF) front, risks remain complex and dynamic. However, the terrorist financing cases are fewer compared to money laundering, but their threat to national security is “substantial” meaning a terrorist attak in the country is likely. The major channels for TF include charities, small transactions, and cryptoassets.

The UK government has responded to emerging threats with stronger legislation, including the Economic Crime and Corporate Transparency Act 2023, and new powers for law enforcement to seize crypto assets. The UK’s AML/CTF strategy now includes a focus on AI, fintech risks, and public-private collaboration.

The 2025 NRA underscores the urgent need for regulated firms to assess and address evolving risks. In addition, it reinforces the UK’s commitment to financial integrity and global security.