Spanish police, in collaboration with Europol and Colombian authorities, have dismantled two criminal organisations involved in laundering money through cryptocurrencies.
It is estimated that the two criminal organisations were involved in laundering up to €2.5m using a variety of different methods, including smurfing and cryptocurrency exchanges. The process of laundering money through cryptocurrencies has grown rapidly alongside the expansion of the technology itself, and many security organisations are stepping up their efforts to tackle the problem.
The investigation began in January 2017, when Colombian authorities warned Spanish officials about a Colombian family with links to criminal gangs involved in drug trafficking. Spanish authorities confirmed the existence of a criminal organisation dedicated to money laundering in Spain and France, operating in the city of Zaragoza, Spain.
How were the organisations using cryptocurrencies?
A second network was discovered operating in Madrid, Spain. This organisation collected large sums of cash, earned via illicit means by criminal groups, and exchanged them for cryptocurrencies, including Bitcoin. Then, this money was transferred back to Colombia, and because of a lack of regulation or oversight in cryptocurrencies, the origin of this money can be successfully hidden.
The other method that the organisations were using was smurfing, which involves dividing their illicit proceeds into smaller payments, which often go unnoticed by regulatory authorities. Spanish and Colombian authorities launched a joint operation, alongside Europol, to take down the criminal organisations.
What were the outcomes of the operation?
Following a targeted strike, which involved a search of ten houses in Spain and two properties in Colombia, 23 members of the group from Spain, Colombia and Venezuela were arrested, and another nine are under investigation. In addition, devices such as phones and computers, and financial documents were seized, and access to ‘virtual wallets’ which are used to store cryptocurrencies was frozen.
Europol facilitated information exchange between the authorities to support the operation, and send four experts to undertake real-time cross-checks of data collected during the investigation against Europol’s databases, and to extract data from seized devices.