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In a major crackdown on illegal financial activities, German law enforcement shut down 47 cryptocurrency exchanges based in the country.
These exchanges were found to have been involved in large-scale money laundering operations by failing to implement key compliance measures, including the Know-Your-Customer (KYC) protocol, a crucial part of anti-money laundering (AML) regulations.
Large-Scale Crypto Money Laundering Exposed
The authorities, led by the Frankfurt Public Prosecutor’s Office and the German Federal Criminal Police Office (BKA), revealed in a September 19 press release that the seized platforms were widely used by cybercriminals involved in ransomware attacks, botnet operations, and illegal black market trade.
Germany has closed 47 crypto exchanges. The BKA reports that these services were used for criminal purposes and provided services for exchanging fiat currencies for crypto assets. pic.twitter.com/oPNjmDYSXp
— Incrypted | TOKEN 2049🇸🇬 (@incrypted) September 19, 2024
These criminals took advantage of the weak AML protocols on the platforms to launder illicit funds with ease. By failing to verify their customer identities, these exchanges enabled these bad actors to circumvent state regulations and convert stolen funds into legitimate currency.
Following the shutdown, the German authorities took control of the associated websites, alerting existing users that their data had been compromised.
“We have found their servers and seized them. We have their data – and therefore we have your data. Transactions, registration data, IP addresses,” the authorities said.
Despite the significant action taken, authorities admitted that bringing all perpetrators to justice may prove challenging.
According to them, many individuals involved in these illegal transactions are located in foreign countries with little or no legal consequences, making extradition or prosecution challenging.
Major Platforms Among the Seized Exchanges
Among the platforms dismantled by German authorities include Xchange.cash, which had been operational for over a decade and had processed more than 1.3 million transactions.
Other notable platforms taken down were 60cek.org, Baksman.com, and Prostocash.com,
which had also facilitated a significant volume of transactions.
This operation is part of a larger initiative by German law enforcement to weaken the infrastructure supporting cyber criminal activities.
Previous actions, such as the seizure of ChipMixer servers in 2023, where €90 million in assets were secured, have demonstrated the effectiveness of this approach.
🧵 Today, I'm sharing my long-standing theory behind a US government covert operation designed to partially crack Bitcoin privacy and deanonymize transactions. I believe that popular Bitcoin mixer ChipMixer is actually a United States government honeypot. Here's why.
— FatMan (@FatManTerra) November 23, 2022
Other major efforts include the takedown of Qakbot malware in 2023 and Emotet in 2021, both of which caused significant financial damage globally.
Similarly, in May, an international operation called “Endgame” targeted the infrastructure of six prominent malware families, disrupting their operations and financial networks as part of an ongoing global effort to combat cybercrime.
