The German police have recently closed down 47 unlicensed crypto exchanges in the country as part of a crackdown on crypto crime. The operation involved the Federal Criminal Police Office (BKA), the Central Office for Combating Internet Crime (ZIT), and the Frankfurt public prosecutor’s office.
The regulators have accused the exchange operators of enabling money laundering on a massive scale due to non-adherence to AML policies. The crackdown focused on the exchanges that supported anonymous transactions, making it easier for criminals to launder the money.
The researchers also established that these platforms did not require registration and identification, facilitating the conversion of cryptocurrencies without supervision. As per the law enforcement agencies, these platforms acted as marketplaces for darknet dealers, botnet operators, and other cyber criminals cleaning dirty money.
The confiscated servers contain many records, transactions, registrations, and IP addresses, among other things. The authorities have access to the customers’ information, but it may be difficult to prosecute the culprits.
The operators are reportedly based in countries with inadequate or no anti-money laundering laws, making prosecuting difficult.
Germany Targets Tech to Fight Crypto Crime
However, while the police got some information from the captured servers, they still recognized the challenge of going after the criminals. Most people involved in such operations are in countries where cybercriminals have little to fear from the law.
Consequently, law enforcement will focus on disassembling the technological support of these crimes. The police have noted that going after the infrastructure is easier than going after the activists.
In particular, they plan to prevent cybercriminals from accessing the servers to clean up their money. This is in line with an ongoing crackdown on the criminal use of cryptocurrencies in Germany.
Thus, German law enforcement has already proven the efficiency of its approach to criminal structures in previous operations—the confiscation and auctioning of Bitcoin from the now-shut-down Movie2k.
For instance, the authors pointed out that social media can be used to shut down websites and disrupt criminal groups. However, such actions can also have side effects in the market, as large sales lead to price changes in the cryptocurrency market.
BaFin Leads Crackdown on Illegal Bitcoin ATMs
This recent crypto sweep comes in the wake of other regulatory measures directed toward the cryptocurrency space that operate outside the law by the German authorities. In August, police carried out a large-scale operation to seize Bitcoin ATMs working without legal permits. They arrested 13 persons and took away €250,000 as they sought to crack down on money laundering.
The operation included 35 raids across Germany and focused on unlicensed Bitcoin ATMs. The Federal Financial Supervisory Authority (BaFin) stressed that the identity of the parties involved in cash transactions of more than €10,000 must be established. According to the country’s financial laws, one can face up to five years in jail for running an outlawed Bitcoin ATM.
BaFin has also cautioned the public against using Bitcoin ATMs, as many devices need to be adequately protected by the necessary legal frameworks. The regulator pointed out that unregulated ATMs present a high risk of money laundering. The nationwide crackdown indicates Germany’s firm stands on ensuring no loopholes in its financial systems.
