Europol and Spanish Authorities Break Up ‘Mafia Cryptocurrency Bank’ Involved in Global Money Laundering

Law enforcement in Spain has successfully dismantled an extensive underground financial network that allegedly laundered over €20 million through cryptocurrency transactions for organized crime groups associated with China and the Arab region, as reported on May 14.

This criminal enterprise, described by police as one of the largest covert crypto-banking operations uncovered in Europe, operated a financial system designed to avoid regulatory scrutiny while enabling transactions tied to various illegal activities, such as drug trafficking, human smuggling, and financial fraud.

In January, the National Police, in collaboration with Europol and Eurojust, executed simultaneous raids at 13 locations across six provinces in Spain and one in Antwerp, Belgium.

Seventeen individuals, believed to be key figures within the operation, were arrested, with 15 currently in pretrial detention. All face accusations of money laundering and involvement in a criminal organization.

Information about the operation was disclosed this week after several months of forensic investigation and international cooperation.

Joint efforts spanning two continents

The inquiry unveiled that the criminal organization was divided into two primary factions, led by individuals from Arab and Chinese backgrounds.

The Arab faction focused on receiving international money transfers into Spain, whereas the Chinese faction, mainly based in Almeria and Madrid, gathered large sums of cash locally. This money was subsequently funneled overseas through intricate cryptocurrency transactions that circumvented standard banking channels.

To remain under the radar, the organization presented its operations as a legitimate money transfer service and advertised through social media to attract a diverse clientele. Cash was physically transported throughout Spain using specially modified vehicles with hidden compartments, a tactic resembling those used in drug trafficking.

Authorities indicated that both factions earned their fees in cryptocurrency, complicating the tracing of profits and the overall extent of the laundering operations.

More than €205,000 in cash, €183,000 in digital assets, 18 luxury cars valued at over €200,000, and 10 properties estimated to be worth more than €2.5 million were seized by the authorities.

Additionally, investigators confiscated encrypted devices, designer handbags valued at €230,000, and a large quantity of premium cigars worth over €620,000, believed to have been acquired with illegal funds.

Increasing prevalence of crypto-related crime

A court in Almeria led the investigation with support from Europol’s European Financial and Economic Crime Centre. Eurojust coordinated judicial efforts between Spanish and Belgian authorities, underscoring the growing importance of international collaboration in tackling financial crimes facilitated by technology.

In recent years, Spain has become a significant center for crypto-related financial crime, with several high-profile incidents involving fraud, misappropriation of confiscated digital assets, and the use of cryptocurrencies for laundering drug and cybercrime proceeds.

This latest operation follows a string of investigations, including a separate case in Marbella where a court clerk allegedly misappropriated €19 million in seized digital assets earlier this month. Authorities also recently targeted eXch in Germany, which was implicated in similar laundering activities.

The case illustrates the persistent challenges that governments face in monitoring cross-border digital assets, particularly when criminal organizations utilize cryptocurrencies as a primary means to facilitate illegal transactions.

While the names of those arrested were not made public by Spanish officials, they acknowledged that the sophistication and geographical scope of the network rank it among the most advanced money laundering operations in Europe to date.

The investigation is ongoing, with authorities continuing to scrutinize digital evidence and financial records to identify additional associates and clients connected to the illicit cryptocurrency bank.