On November 13, the European Union Agency for Law Enforcement Cooperation (Europol) announced that it had successfully cracked down on a criminal network engaged in online scams via calls. The network has spread throughout Europe.
According to Europol, the operation was carried out on January 11, 2023, following an investigation opened in June 2022 at the request of the German authorities. Together with the national authorities of the other countries, Europol carried out raids in 22 different places between Bulgaria, Cyprus and Serbia. This resulted in the arrest of 15 people, 14 of whom were in Serbia and one in Germany.
Europol seizes $1 million in cryptocurrencies from physical wallets
Along with the arrests, authorities also seized 3 physical wallets containing approximately $1 million in cryptocurrencies and approximately €50,000 in cash. They also seized 3 vehicles, electronic equipment, backups containing important information and other documents. The investigation is still ongoing as the criminal network is believed to have more call centers than were raided.
According to Europol, the criminal network ran a cryptocurrency pyramid scheme through which it lured victims into offering “seemingly exceptional” cryptocurrency investments with the promise of large, guaranteed profits. The network was able to capture hundreds of millions of euros with the operations of only 4 call centers. However, many victims chose not to report to law enforcement, making it difficult to quantify the damage.
The modus operandi of scammers was to initially ask for small amounts of money, usually in the triple-digit range, to gain the trust of their victims. Once a more intimate relationship was established, they convinced victims to transfer larger amounts each time until the fraudsters had enough to cease communications. According to Europol, the criminal network stole at least $2 million from unsuspecting individuals in Germany.
The use of cryptocurrencies in criminal activities
As reported per Europol, the agency works hand in hand with several international authorities to “stay one step ahead of those who misuse crypto-assets to commit crimes and launder money”.
However, Europol noted that although cryptocurrencies have become attractive to criminals due to their secrecy and decentralization features, their use in criminal activities represents a tiny fraction compared to criminal activities involving fiat currency:
The use of cryptocurrencies for illicit activities appears to be only a small part of the overall cryptocurrency economy, and it appears to be comparatively smaller than the amount of illicit funds involved in traditional finance.
Governments around the world are starting to pay more attention to how cryptocurrencies are used in criminal activities. One example is the United States government, which has taken action against certain cryptocurrency platforms that facilitate criminal activity. The most obvious case is the “Tornado Cash” cryptocurrency mixer, which was sanctioned by the US government for being used by criminals to obfuscate their transactions, but other centralized exchanges have also had to deal with the authorities for similar reasons.
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