Europol has dismantled an underground “cryptobank” that facilitated the laundering of millions of euros through hawala-type banking systems. It is estimated that the amount of illegally obtained funds exceeded $23 million, with the total value of seized assets surpassing $3.5 million.
This is reported by Finway
As part of a special operation, European law enforcement arrested 17 individuals in countries such as Spain, Austria, and Belgium. Reports indicate that the criminal group offered parallel banking services, including illegal cash collection and cryptocurrency-to-cash exchanges.
Asset Seizures and Investigation Details
During the raids, the following items were seized:
- approximately $229,600 in cash;
- $204,960 in cryptocurrencies;
- 18 luxury cars valued at over $232,000;
- 10 real estate properties worth over $2.8 million;
- elite cigars valued at approximately $701,000;
- luxury bags worth about $259,000.
The total value of the seized assets exceeded $3.5 million. The operation was conducted with the support of Europol, which financed the deployment of three Spanish investigators to Belgium and Austria, as well as sent four agents for on-site support, including two to Spain.
The Hawala System and Its Features
The criminal group consisted of two main factions: Chinese nationals were responsible for collecting cash in Spain, while Arab nationals handled international money transfers. The scheme also involved the integration of cryptocurrencies into the hawala system—an informal financial network that allows for the transfer of funds without the actual movement of money.
“Hawala is an Arabic term meaning ‘transfer’ or ‘remittance.’ The system allows for money transfers without traces in traditional banks,” explained IMF senior economist Mohamed El-Korchi.
Transfers were carried out through “hawaladars”—intermediaries who trustedly transmitted funds between countries without the physical movement of cash. The criminals primarily had clients from the Middle East and mainland China.
The uncovering of this network comes as the European Union considers strengthening legislation to track cryptocurrency transactions. “The EU is exploring the possibility of retaining data on the senders and recipients of funds, which could also be extended to cryptocurrency asset providers,” noted Ireland’s Minister of Finance Paschal Donohoe.
It is worth mentioning that in 2024, Europol conducted Operation Endgame, which became the largest raid in history against malware in the form of botnets and networks of so-called “droppers.”