The German government has recently closed down 47 cryptocurrency exchanges, alleging that these platforms have knowingly facilitated an “underground economy” that benefits cybercriminals. Authorities are now shifting their focus toward the potential criminal activities of the users on these exchanges.
In a statement issued on September 19, Germany’s federal criminal police, along with the main prosecutor’s office in Frankfurt and the national cybercrime office, claimed that these exchanges have been “deliberately concealing the origin of criminally obtained funds on a large scale” by failing to properly implement legal measures designed to combat money laundering.
The authorities assert that the users of these exchanges include ransomware operators, botnet managers, and black market traders, who exploit these platforms to launder money derived from illegal activities, effectively reintegrating it into the legitimate economy.
The websites of the confiscated cryptocurrency exchanges now bear a stern notice from the German government, stating: “We have located and seized their servers—development servers, production servers, and backup servers. We possess their data, and therefore we have your data, including transaction records, registration details, and IP addresses,” the statement warned.
Germany’s warning to users of the seized cryptocurrency exchanges. Source: German government
However, German officials have noted that a large-scale prosecution may prove challenging, as many of the offenders operate from outside the country.
“Since cybercriminals frequently reside abroad and may be tolerated or even protected by certain nations, they often elude the reach of German law enforcement,” the statement continued.
Among the exchanges that were shut down, Xchange.cash had been operational since 2012, handling almost 1.3 million transactions for around 410,000 users. Other notable seized platforms included 60cek.org, Baksman.com, and Prostocash.com, all of which had significant user bases and transaction volumes.
Information about eight of the 47 cryptocurrency exchanges shut down by German authorities. Source: German government
In related news, the German government was once one of the largest holders of Bitcoin globally. However, it recently divested nearly 50,000 Bitcoin (BTC), valued at approximately $3.15 billion, through several transactions in June and July. These funds were originally confiscated from the piracy website Movie2k.to in 2020.
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