The German government has closed 47 cryptocurrency exchanges, accusing them of facilitating cybercriminal activities, including money laundering. These platforms allegedly allowed criminals to convert illicit funds into legitimate currencies, supporting an “underground economy” for cybercrime. The authorities have seized all related servers and data and are now shifting their focus to the users involved in the illegal activities.
Germany’s federal criminal police office, Frankfurt’s prosecutor’s office, and the country’s cybercrime unit spearheaded the operation. The exchanges are accused of failing to comply with anti-money laundering (AML) regulations, enabling criminals like ransomware operators, botnet users, and black market traders to launder money on a large scale.
The crackdown was made public on September 19, 2024. The operation follows an investigation into these platforms, some of which had been in operation since 2012, including Xchange.cash, which reportedly processed 1.3 million transactions for 410,000 users.
While the exchanges operated online and served a global audience, many of their users and operators are based outside of Germany. This international reach poses challenges for German authorities in prosecuting those involved in illegal activities.
German authorities allege that the exchanges deliberately overlooked AML requirements, making them attractive to cybercriminals seeking to launder funds obtained through illicit means. The exchanges enabled criminals to integrate stolen funds into the legitimate financial system. One platform, Xchange.cash, had been facilitating such transactions for over a decade.
German law enforcement seized the exchanges’ servers and data, including IP addresses, transaction records, and registration details. A bold warning is now displayed on the websites of the closed platforms, informing users that their data is in the hands of authorities and that investigations are ongoing. However, the German government acknowledges that prosecuting many of these cybercriminals could be difficult, as they often reside in countries where law enforcement is either ineffective or complicit.
Despite this hurdle, the authorities are determined to continue their investigation and pursue criminal charges where possible, leveraging the vast amount of data collected during the shutdown of these platforms.
