A Netherlands court in the District of Rotterdam has seized $29 million worth of Bitcoin. The coins have been seized from a Dutch couple that has been accused of money laundering. It is said that the crimes have been committed using the dark-net.
The court has provided official information regarding this case. It is said that the man and his spouse have been living in the northern city of Hilversum. Both have engaged in money laundering large sums of cryptocurrency.
The Dutch court handed both threat actors a prison sentence. The man was sentenced to 2 years behind bars while his spouse faced 2.5 years in prison. In total, the duo is estimated to have laundered over $19 million in cryptocurrency. All of this was done in a period of 2.5 years. This sentence has been handed out after their transactions have been linked to dark-web criminal activity.
The court published a document in Dutch regarding the investigation that led to the arrests. As it turns out two separate sums of bitcoin have been seized. One sum consisted of 1,488 BTC and the other of 1,044. Both sums were confiscated from the two convicts after being discovered. Additionally police seized about $300,000 in cash. This added an additional fine of $53,000 to each threat actor.
The Dutch court found out the money laundering technique employed by the duo. It was reported that the couple would use private individuals and businesses to convert crypto. Usually bitcoin to Euro.
The transactions involving huge sums of Bitcoin and Fiat currency are reported to be illegal. The fact that the couple failed to notify relevant government agencies reveals their intentions. The participants intended to stay anonymous.
The court also found more reasons to charge the criminal couple. It was discovered that the duo exploited a restaurant. This was done as grounds for currency exchange. All of these exchanges did not adhere to traditional AML/KYC obligations.
It is not uncommon for dark-net criminals to take this approach. Many use legit businesses to mask illicit crypto transactions. This helps criminals avoid normal checks and verification that is typically required.
Links to the Dark-Net
The District Court in Rotterdam ruled that the couples huge sums of money was not legal. The cryptocurrency held by the couple had obvious links to the dark-web. This court ruling follows common knowledge that illicit crypto trades facilitate illicit activity. Exchange of illicit goods and services, child sex abuse material, stolen data and weapons are all crimes facilitated by crypto.
The court concluded that the Hilversum traders did not take proper precautions. No identity was requested from individuals that sold them large sums of bitcoin. The couple accessed customers using promotional material found in underground platforms. This resulted in most Bitcoin being traced back to the dark-net.
Traditional Money Laundering
CipherTrace is a blockchain threat intelligence and anti-money laundering forensic firm. Recently CipherTrace published an article regarding dark-net criminals and money laundering. A trend was observed about where criminals choose to launder their money. Typically exchanges that exist in jurisdictions with weak anti-money laundering laws get exploited the most.
It is estimated that over $2.5 billion worth of bitcoin has been laundered. All these coins are linked to illicit trades. Criminals were able to launder all the coins thanks to a system of hyper-connected crypto establishments around the world.
Other ways of laundering cryptocurrency are also becoming popular among criminal rings. The use of legitimate businesses to clean "dirty" crypto has become a very common occurrence.
The way criminals use legit businesses to launder money is quite simple. A criminal enterprise moves to buy a legal and registered entity like a restaurant. The entity has to be established and operational for a considerable amount of time.
The objective is to acquire an already existing structure with employees and a profit. A popular restaurant with many loyal customers is an example. Customers offer an ideal smokescreen for money launderers. Criminals select a business with customers in-case authorities decide to pass by.
In the background, the restaurants bank account would be doing a much harder job than usual. Dirty money would be mixed with the real profits to be used in legal trades around the world. This is the traditional and most popular way to launder any type of money. Criminals are fining ways to use this technique in cryptocurrency laundering.
The Cryptocurrency space is becoming more regulated than ever. While bad for some, this is overall great for crypt-enthusiasts. This makes it much more difficult to use currency that has been obtained through illegal trades. This is the best approach to reduce criminal crypto activity.