In a significant move against illegal money laundering activities, German authorities have shut down 47 cryptocurrency exchange platforms. The operation was led by Germany’s Federal Criminal Police Office (BKA) and the Central Office for Combating Internet Crime, targeting platforms that allowed the exchange of cryptocurrencies and traditional currencies without identity verification, as reported in a BKA press release.
Violation of “Know-Your-Customer” Protocols
These exchanges facilitated transactions without adhering to the mandatory “know-your-customer” (KYC) protocols, a key regulatory measure requiring users to verify their identity before conducting financial transactions. By bypassing these protocols, the platforms enabled users to trade cryptocurrencies like Bitcoin and Ethereum anonymously and at high speed. According to the BKA, these services were frequently exploited by criminals looking to obscure the origin of funds acquired through illegal activities, such as ransomware attacks or drug sales on the dark web.
Nationwide Operation Leads to Major Seizures
On August 20, a widespread anti-money laundering operation was carried out by German authorities, resulting in the seizure of 13 cryptocurrency ATMs and nearly $28 million in cash across 35 locations nationwide. The raids, spearheaded by financial regulator BaFin, targeted ATMs that were operating without the proper licenses, posing serious risks for money laundering.
Part of a Broader Fight Against Cybercrime
The shutdown of these exchange platforms forms part of a larger effort to dismantle the infrastructure supporting cybercrime. Investigators were able to collect user and transaction data from the platforms, which could play a crucial role in future investigations. This information may help authorities trace individuals using these services to launder illicit funds.
This crackdown follows other high-profile actions by German law enforcement. In 2023, authorities seized the ChipMixer platform, which had reportedly laundered around €90 million worth of cryptocurrencies. Over recent years, German authorities have increasingly targeted various cybercrime networks, including those responsible for spreading malware.
Bitcoin Transfers Sparked Market Movements
In June, the BKA began transferring approximately 50,000 BTC that had been seized from the operators of Movie2k.to, a notorious piracy website shut down in 2013. Over a month-long period from June to July, the German government completed the sale of this large Bitcoin reserve, which contributed to a dip in the cryptocurrency’s market price.
