The use of virtual currencies is an attractive way for criminals to launder money, as Bitcoin transactions are not monitored by financial authorities.
On Jan. 19, Dutch authorities arrested 10 people and raided 15 locations in Rotterdam, Zoetermeer, Almere, Dortdrecht, Zaandam, Schiedam, The Hague and Putten. Police seized an undisclosed number of luxury vehicles, bank accounts, cash, and chemicals used for the production of the drug ecstasy.
The police operation was conducted with the help of the US, Lithuania, Australia and Morocco.
According to the Lithuanian Financial Crime Investigation Service, the group laundered up to € 20 million (more than US$ 21 million).
According to prosecutors, the suspects used Bitcoins via the 'Dark Web,' a part of the internet not easily accessable for the average internet user. The Dark Web hosts a virtual market place similar to ebay.com where people can trade goods anonymously using virtual currencies.
As such, the Dark Web has become an attractive place for criminals looking for a way to launder funds or sell drugs, firearms and other illegal goods.
Some of the 10 suspects arrested were identified as Bitcoin traders, believed by prosecutors to have acquired Bitcoins by selling illegal goods. Others were identified as Bitcoin cashers, who allegedly exchanged them for Euros, which could later be withdrawn as 'clean money' from ATM machines.
The investigation into the group was initiated after banks notified authorities that large sums of money were being deposited and then immediately withdrawn at ATM machines.
The increasing use of virtual currencies poses new challenges for law enforcement. Apart from illegal trade, the lack of regulation also provides ways for cyber-criminals to blackmail individuals and companies or to steal virtual currency.
