German authorities have shut down 47 cryptocurrency exchanges operating in the country for allegedly facilitating large-scale money laundering operations for cybercriminals. According to an official statement by the Frankfurt main prosecutor’s office, the German office for combating Internet crime, and the federal criminal police office, these exchanges deliberately allowed their users to bypass Know You Customer (KYC) policies. The KYC policy is a verification process that requires platform users to submit their basic identification details. However, since these exchanges allowed users to complete transactions without this verification, they created a conducive environment for cyber criminals to launder the proceeds of their illegal activities with little to no risk of
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German authorities have shut down 47 cryptocurrency exchanges operating in the country for allegedly facilitating large-scale money laundering operations for cybercriminals.
According to an official statement by the Frankfurt main prosecutor’s office, the German office for combating Internet crime, and the federal criminal police office, these exchanges deliberately allowed their users to bypass Know You Customer (KYC) policies.
The KYC policy is a verification process that requires platform users to submit their basic identification details. However, since these exchanges allowed users to complete transactions without this verification, they created a conducive environment for cyber criminals to launder the proceeds of their illegal activities with little to no risk of being prosecuted.
Some of the seized exchanges include Xchange.cash, 60cek.org, Banksman.com, and Prostocash.com. The police stated that the top users of these exchanges include ransomware groups, darknet traders, and botnet operators.
The Hunt Begins
Authorities revealed that they have seized the servers of these 47 exchanges and are currently hunting down their criminal users using the transaction details and IP addresses obtained from the servers.
When users visit the websites of the seized exchanges, they are immediately redirected to a page titled “Operation Final Exchange.” There the authorities send out a warning to the criminals, stating that the anonymity they were promised by exchanges is false.
The warning reads:
We have found their servers and seized them – development servers, production servers, backup servers. We have their data – and therefore we have your data. Transactions, registration data, IP addresses… Our search for traces begins. See you soon.
Geographic Limitations
None of the cybercriminals have been arrested, as German law enforcement noted that most of the perpetrators reside in countries that might offer them protection.
“Since cybercriminals often reside abroad and are tolerated or even protected by some countries, they often remain inaccessible to German law enforcement,” they said.
Nevertheless, authorities remain confident that the extensive user and transaction data secured from the seized exchanges will come in handy during the ongoing investigations.
Still, the operators of the seized exchanges face serious legal charges, including money laundering and operating illegal trading platforms under Sections 127 and 261 of the German Criminal Code (StGB). The operators will face multi-year prison sentences if found guilty of these charges.
The ongoing crackdown highlights the German government’s commitment to dismantling the infrastructure of cyber criminals in the crypto space. The country’s authorities had earlier this year offloaded over $3 billion worth of confiscated BTC.