Standing on the windswept balcony of the expansive apartment in Monaco’s Mareterra development feels a little like being on a superyacht heading out to sea. The unobstructed view of the Mediterranean stretches to the horizon, the pale ash floors evoke a ship’s deck, and fresh breezes keep things cool even on the hottest summer days.

The other thing the flat shares with a floating luxury palace: its price. Listed at more than €60 million ($70 million), the three-bedroom home costs more than many billionaires might spend on a sumptuous schooner or cruiser.

Those prices haven’t stopped the world’s ultrawealthy from snapping up Mareterra properties since they were first listed while still under construction in 2017. The 114 waterfront homes initially sold for €16 million to almost €500 million, and they would now likely cost even more. That makes Mareterra one of the most expensive and exclusive addresses on the planet, with views of the winding Grand Prix circuit, just a 10-minute walk from the storied casino and a few minutes farther from the yacht harbor.

The problem is, some prospective buyers of those properties have trouble establishing they’re the kind of residents the principality wants. For more than a century, Monaco has attracted tycoons, movie stars and sports legends—not to mention some less-savory types whose fortunes can’t always be traced to legitimate sources. A century ago, Somerset Maugham purportedly dubbed the area “a sunny place for shady people.” But Monaco, under increasing pressure to crack down on financial misdeeds, says those buyers are no longer welcome.

Those concerns came to a head in June 2024, just six months before Mareterra’s inauguration, when the country of 39,000 residents was added to the “grey list,” a roster of jurisdictions such as Syria, Venezuela and Yemen deemed insufficiently vigilant about dirty money.

The designation by the Paris-based Financial Action Task Force, a global watchdog created by the Group of Seven in 1989, sent Monaco into panic mode. As concern about being added to the list grew, the reigning monarch, Prince Albert II, shook up the Finance Ministry and strengthened regulation. The hit to Monaco’s image was “a wake-up call,” says Pierre-André Chiappori, who served as finance minister from March 2024 until last month. “We were maybe not alert enough in the past.”

Four areas were singled out as potential fronts for money laundering: real estate, yachting, sporting agents and private banks. The principality has started clamping down on companies that fail to flag suspicious activities, and it has set up the Autorité Monégasque de Sécurité Financière, a financial intelligence and anti-money-laundering watchdog. There are signs, though, that the actions are diminishing Monaco’s appeal for some people wealthy enough to afford the eye-popping prices at Mareterra, built on nearly 15 acres reclaimed from the sea.

The fresh laws and greater oversight include a tightening of so-called know-your-customer rules, which require businesses to understand where their clients’ money comes from and alert authorities about any suspicions. In the past year the regulator has penalized six firms for deficiencies, including two real estate agencies deemed to have insufficiently vetted buyers, including one that handled a Mareterra transaction.

As Monaco works to shake the grey-list designation, it’s instructive to look at the real estate sector, the heart of Monaco’s economy.

The principality’s property records as well as a stash of emails and preliminary deeds from Mareterra offer a snapshot of early sales and the vast sums at play. Bloomberg Businessweek reviewed documents from Distributed Denial of Secrets, a nonprofit that preserves hacked and leaked materials believed to be in the public interest. While there’s no suggestion that the developer or any individuals named in the materials were involved in any wrongdoing, the documents provide insight into the inner workings of the highest end of the property market, its broad geographic reach and Monaco’s concerns about money laundering.

The information included hundreds of messages between developer L’Anse du Portier, a local notary, bankers and several dozen prospective buyers or their representatives. They date from 2017, when construction of the seabed infrastructure was still underway, through mid-2022, more than two years before people began to move in. Interested parties included storied names such as UK chemicals billionaire Jim Ratcliffe; Formula One star Max Verstappen (he wanted six bedrooms and 14 parking spots); and Ukraine’s richest man, Rinat Akhmetov, who shelled out €471 million—almost certainly the priciest flat ever sold—for five full floors in an 18-story ceramic-and-glass structure (called “Le Renzo,” for its designer, starchitect Renzo Piano) that appears to float over the neighborhood.

Buyers had to be approved by Patrice Pastor, the head of Monaco’s most powerful property dynasty and the man who spearheaded the development. A L’Anse du Portier executive told the French daily Nice-Matin in 2022 that Mareterra required personal interviews with prospective buyers, and not just their legal representatives, with the aim of getting “the best people for the neighborhood.” That restriction, the executive said, would effectively rule out “clients from the Middle East, Asia and most Russians,” who tend to be less interested in dealing with such details on their own.

Yet among the first transactions in the cache of emails were deals by individuals with links to Russia that added up to more than €1 billion. Little-known aviation executives Konstantin Krivchenko and Dmitry Kuptsov—Russian-born, but with Irish passports—wanted to acquire four villas at €100 million each through specially created companies that Monaco authorities approved over Christmas 2017. Later emails indicate the pair missed payments on some properties, and they ultimately downsized to a single 2,300-square-meter (25,000-square-foot) villa with hammam, sauna, cinema, and massage and wine-tasting rooms. A representative for the men declined to comment.

In 2018, Valeriy Votinov, the then-21-year-old son of a former executive at oil giant Rosneft, offered more than €500 million for nine properties—among a flurry of transactions in the principality he was involved in around that time. In an email, Pastor described the largest of the prospective deals at Mareterra as “an important step” for the development. At the time his father, Andrey, was fighting extradition from the UK to Russia on charges of embezzlement (Russia’s request was turned down as British courts said the defendant might not get a fair trial).

Three years later, emails show the younger Votinov agreed to pay an additional €135 million for a five-story villa called Dream Catcher, with indoor and outdoor pools, a 10-car garage, and a disco in the basement. Yet when he left Rosneft in 2014 after two decades there, Andrey Votinov held a stake that would have been worth only about $1 million, according to company filings.

As Votinov tried to resell three of his flats after Russia’s full-scale invasion of Ukraine, the proposed buyer’s bank asked questions. A lawyer for Votinov wrote back: “Given the current context, it may be useful to point out that this shareholder is a Cypriot national and does not have Russian nationality.” Neither Votinov responded to requests for comment.

Russian steel tycoon Victor Rashnikov and his daughter had planned before the war to purchase Mareterra properties worth tens of millions of euros involving a Cyprus company and a Geneva bank. Rashnikov subsequently faced sanctions, and his attorney says his sale never went through and that he owns no property in the principality.

The Monaco government declined to comment on any particular transactions but says that it applies all EU sanctions and that any significant real estate purchases are subject to review, particularly those in Mareterra. Guy-Thomas Levy-Soussan, a lead executive behind the development, says “the sale of properties in Mareterra adhered to the highest standards of compliance,” in particular when it comes to money laundering and international sanctions. He says L’Anse du Portier gathered information on prospective buyers—the origin of their wealth, whether they’re legal residents of the principality, and if they already owned property there—to guide its selection, and that many were turned down.

Even before Monaco landed on the grey list, authorities say they were trying to root out so-called letter-box residents—people benefiting from the country’s zero income tax rate who didn’t really live there for the required six months annually. Newcomers must open a bank account and find housing before getting a residence permit. Homes must be big enough to house everyone who’s said to be living there, and authorities sometimes monitor utility bills and credit card expenses as evidence. “Monaco is a lot less of a ghost town compared to 10 years ago,” says Florian Valeri, head of real estate brokerage Barnes Valeri Agency.

The grey-list designation adds to growing concerns among some locals that Monaco has lost ground as an international wealth destination, though the war in the Persian Gulf may change those calculations. An annual index from Barnes’ global parent, conducted before the hostilities, showed Monaco dropping 10 spots this year to 14th among cities with the greatest appeal for the ultrarich. Property consultant Knight Frank says that while Monaco remains the planet’s priciest real estate market, Dubai led growth in high-end residential property purchases over the past five years. And citizenship adviser Henley & Partners’ 2026 list of leading destinations for millionaires is topped by the United Arab Emirates and includes Portugal, Greece, Italy and Switzerland—but not Monaco.

The slide risks cooling a property market that’s as hot as you’d expect in a country smaller than Central Park with the world’s highest per capita income. But the stronger rules for banking, starting businesses and applying for residence permits are also becoming impediments to investment. “It’s a real challenge to open a bank account in Monaco,” says Remi Delforge, a lawyer who advises foreigners moving to the principality.

One person working in the Monaco property sector says a wealthy person from the Middle East recently gave up trying to gain residency after being asked for bank statements dating back decades, including from institutions that no longer exist. Some banks are reluctant to take on any new Chinese and Russian clients, says the person, who asked not to be identified discussing private transactions.

Chiappori, the former finance minister, says Monaco has carried out a sweeping inventory of property companies and that further money-laundering-related sanctions are in the pipeline. While it’s uncertain how long it will take to get off the grey list, he says the tougher restrictions are permanent. And if that means some potential buyers decide against Mareterra or Monaco’s next hyper-expensive project, that’s OK. “We don’t need dirty money,” he says. “The cost of tarnishing our image would be much higher than the benefits of selling an expensive apartment.” —