Europol supports Spanish police in dismantling crypto laundering ring

Maria Nikolova

The criminals carried out several money laundering schemes involving the transfer from fiat currency to virtual assets to hide the illegal origin of the proceeds.

Europol has supported Spain in dismantling a criminal organisation providing large-scale crypto money laundering services to other criminal organisations, Europol announces today.

The criminals ran several money laundering schemes involving the transfer from fiat currency to virtual assets in an effort to hide the illegal origin of the proceeds. The criminals used crypto ATMs and a method known as smurfing – splitting illicit proceeds into smaller sums and placing these small amounts into the financial system to avoid suspicious transaction reporting.

The Spanish Civil Guard (Guardia Civil) arrested eight people and charged eight more for involvement in the crypto money laundering ring. Seven houses were searched as a part of the operation. The Spanish authorities froze four ‘cold wallets’ and 20 ‘hot wallets’, to which €9 million was transferred, as well as several bank accounts.

The organisation managed a cryptocurrency exchange business, including two crypto ATMs to deposit criminal cash and transform it into cryptocurrency for other criminal groups. Cash pick-ups carried out by cash-carriers followed by smurfing techniques to deposit the criminal cash in several bank accounts controlled by the organisation. The funds were moved through several accounts in the process of layering. Afterwards, the money was exchanged into cryptocurrency.

Large transfers to bank accounts controlled by the organisation coming from corporate entities owned by gangs using their criminal money laundering services. Immediate overseas transfers were then wired to crypto exchange platforms.

The operation was a follow-up of operation Guatuzo also supported by Europol in which 23 people were arrested in summer 2018 in Spain and Colombia.

Europol supported the investigation by facilitating the exchange of information. On the action day, Europol experts were deployed to Spain to allow for real-time exchange of information and cross-checks of the data gathered in the course of the action against Europol’s databases.

In the European Union Serious and Organised Crime Threat Assessment (SOCTA) 2017, Europol stated that an increasing number of individual criminal entrepreneurs offer Crime as a Service (CaaS). The online trade in services enables individual criminals to operate their own criminal business without the need for the infrastructures maintained by ‘traditional’ organised crime groups.

As FinanceFeeds reported back in January 2018, Europol, INTERPOL and the Basel Institute on Governance agreed on stepping up their efforts to combat the misuse of cryptocurrencies by criminals and terrorist financiers to launder money and support other criminal activities.

The agencies agreed to increase information sharing in the field of money laundering and digital currencies through the use of channels such as Europol, INTERPOL, the Egmont Group and FIU.net, as well as to take action against digital currency mixers/tumblers. The latter are designed to anonymise transactions, which burdens the work of law enforcement agencies to detect and trace suspicious transactions.

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