German law enforcers have dismantled dozens of crypto exchanges that they accused of enabling money laundering and other offenses.
Officers from the Frankfurt am Main Public Prosecutor’s Office – Central Office for Combating Internet Crime (ZIT) and the Federal Criminal Police Office (BKA) took part in the operation, which targeted 47 exchanges.
A message from the BKA claimed that the exchanges knowingly concealed the origin of criminal funds on a large scale, by failing to perform Know Your Customer (KYC) checks. Specifically, they didn’t register new customers or check for proof of identity, enabling their ‘customers’ to anonymously launder funds into other digital currencies.
In this way, the exchanges provided an essential service to cybercriminals such as ransomware actors, darknet traders and botnet operators, the BKA argued.
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Operation Final Exchange, as it has been dubbed, led to the seizure of dozens of servers associated with the exchanges. That means investigators will now have plenty of leads to follow as they attempt to trace the individuals using platforms such as Xchange.cash, Multichange.net and CoinBlinker.com.
“For years, the operators of these criminal exchange services have led you to believe that their hosting cannot be found, that they do not store any customer data and that all data is deleted immediately after the transaction. An apparently unregulated hub allowing you to launder the proceeds of your criminal activities without fear of prosecution. From our point of view: nothing but empty promises,” reads a note from police hosted on the captured domains.
“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.”
The BKD claimed that chipping away at cybercrime “infrastructure” in this way is an important strategy given that many cybercrime groups operate with impunity from within hostile states such as Russia.
Its current efforts follow two noteworthy operations in 2023 which led to the takedown of prolific crypto mixer ChipMixer and dark web marketplace Kingdom Market.