In the digital era, enhancing transparency has emerged as an important objective in combating financial crime, notably in high-value sectors such as real estate. The real estate sector is susceptible to illicit financial activities due to its capacity to cover the origin of criminal proceeds through high-value transactions, frequent cash use, and pricing manipulation, compounded by regulatory gaps and limited oversight that facilitate exploitation with minimal risk of detection. Paradoxically, efforts to increase transparency—particularly through digitalization—may also expose the real estate sector to new forms of risk, as greater information flows and automated systems can be exploited by sophisticated actors to legitimize fraudulent transactions under the guise of compliance. The purpose of this chapter is to document the contradictory relationship between market transparency and the incidence of financial fraud in the European Union real estate sector, facilitated by digital innovation, using a mixed research approach. Drawing on a comparative cross-country analysis, this chapter develops a conceptual framework for understanding the transparency paradox, highlighting how digital instruments can facilitate financial crimes in both low- and high-transparency real estate markets. The theoretical and empirical evidence suggests that a high degree of real estate market transparency is no guarantee against financial fraud; on contrary, when not embedded in enforceable and cross-linked institutional systems, transparency may become a tool to obscure illicit activities under a veneer of legitimacy. The chapter contributes to the broader understanding of how digitalization must be strategically governed to close the gap between transparency as policy and transparency as protection in the context of financial crime.