Two German governmental agencies out of the Frankfurt am Main Public Prosecutor’s Office have shut down 47 illicit exchanges for involving and facilitating money laundering.
In a recent report, the authorities noted that the exchanges allegedly committed money laundering by acquiring and concealing the origin of criminally obtained funds.
Exchanges Bypass KYC Requirements
The platforms also bypassed know-your-customer (KYC) procedures to verify users’ identities before permitting crypto asset transactions. This lack of transparency in the origin of the funds contributed to the flow of illegally acquired money, according to the report.
While the recent action is not new to the German authorities, the report stated that exchange services that facilitate anonymous financial transactions, enabling money laundering, are a critical component in the criminal value chain of cybercrime. These platforms are often exploited by ransomware groups, darknet traders, and botnet operators to funnel ransom payments or other illicit gains into legitimate financial systems, allowing them to launder money acquired through illegal activities.
Germany has been a leader in the European Union in pushing for a tighter crypto framework, especially since the implementation of the European Union’s Markets in Crypto Assets (MiCA) regulation, aimed at setting clear rules for crypto platforms and ensuring consumer protection.
Authorities Secure User and Transaction Data
As part of the investigation, the Central Office for Combating Internet Crime (ZIT) and the Federal Criminal Police Office (BKA) secured user and transaction data from the exchanges, which is used to combat cybercrime further.
The actions taken by German law enforcement are intended to disrupt and dismantle the infrastructure supporting cyber criminals, according to the report.
This is not the first time the German authorities have handled illegal operations and financial misconduct in the country. Earlier this year, they confiscated 50,000 BTC (worth $2 billion at the time) from the illegal streaming platform Movie2K, which has since been shut down.
