The German government has recently taken decisive action against illicit activities in the crypto sector by shutting down 47 crypto exchanges. This move is part of a broader effort to combat the increasing use of digital currencies for illegal purposes, particularly money laundering and the facilitation of the “underground economy.”
According to a Friday statement by Germany’s Federal Criminal Police Office (Bundeskriminalamt, or BKA) and the Attorney General’s Office in Frankfurt, the targeted exchanges were allegedly involved in concealing the origins of criminally obtained funds. They failed to comply with essential legal requirements, such as the know your customer (KYC) protocols, which are designed to prevent money laundering by verifying the identity of their clients.
“[They have been] deliberately concealing the origin of criminally obtained funds on a large scale through [the] inadequate implementation of legal requirements for combating money laundering,” the report dated 19 September 2024 read.
The crackdown revealed that these crypto exchanges and platforms were allegedly used widely by cybercriminals, including ransomware operators, botnet controllers, and black market traders, to launder money obtained through illicit means. The platforms operated by bypassing legal checks, thus allowing these criminals to integrate their illicit gains into the legitimate financial system.
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Details of the affected crypto exchanges
Among the affected platforms were Multichange.net, Xchange.cash, 60cek.org, prostocash.com, bankcomat.com, 4ange.me, and Baksman.com. These platforms had been in operation for varying durations, with some dating back to 2012, while others were as recent as 2023.
Collectively, the crypto platforms served hundreds of thousands of users and facilitated millions of transactions. German authorities have now seized their servers, user data, transaction histories, and IP addresses linked to these platforms.
At the time of writing, the websites of these crypto exchanges currently display a warning message from the German government. This indicates that the German authorities now have access to customer and transaction data, sending a clear message to criminal users that they are under scrutiny.
The warning message 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.”
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While the German authorities have successfully dismantled these platforms, they face significant challenges in prosecuting the individuals behind these operations. Many of the perpetrators reside in countries outside of Germany, where they are often beyond the reach of German law enforcement.
Consequently, German officials have acknowledged the difficulty in holding these individuals accountable, focusing instead on disrupting the infrastructure that supports these illegal activities. “Since cybercriminals often reside abroad and are tolerated or even protected by some countries, they often remain inaccessible to German law enforcement,” the authorities said.
This is not the first time Germany has taken a tough stance against crypto-related crime. Earlier this year, the BKA seized nearly 50,000 bitcoins from the operators of the now-defunct piracy site Movie2k.to. These cryptoassets were subsequently sold within months, causing significant turbulence in the crypto market.
Overall, the shutdown of these 47 crypto exchanges denotes a significant step in Germany’s efforts to regulate the crypto industry and curb its misuse for criminal purposes. It serves as a stark reminder to other platforms to adhere to legal requirements and cooperate with authorities in preventing illegal activities.
Ndianabasi Tom A crypto journalist and content writer who has been talking about cryptocurrency and blockchain technology since 2018, Ndianabasi is a Writer at Crypto Asset Buyer (CAB).
