Europol Cracks $23.5M Crypto Laundering Ring Mimicking Hawala Networks

Law enforcement strikes again—this time dismantling a crypto scam that thought it could outsmart regulators by dressing up as a traditional hawala system. The operation, which moved dirty money through decentralized channels, proves even old-school tricks get a Web3 makeover.

How it worked: The ring used crypto’s borderless nature to mimic informal value transfer systems, avoiding AML checks like a DeFi protocol dodging SEC scrutiny. Spoiler—it didn’t work.

The takeaway? Criminals keep innovating, but chain analytics cuts through privacy theater. Meanwhile, traditional finance still can’t track a wire transfer across time zones.

Group Advertised on Social Media as Legitimate Remittance Providers

The Arab faction of the crypto laundering operation was responsible for handling international transfers into Spain, while the Chinese faction, based out of Almeria and Madrid, collated cash to run the operations.

The group then moved the collected cash through a complex web of crypto transactions to circumvent traditional banking systems. To facilitate the transport to Spain, they concealed the cash in modified vehicles designed with hidden compartments that the authorities likened to drug trafficking techniques.

Furthermore, the authorities explained that both factions earned commissions in crypto, which made it difficult to trace the profits and uncover the actual scale of the group’s laundering activities.

Authorities have seized €183,000 in crypto (approx. $205,000), €206,000 in cash (approx. $230,700), and €421,000 across 77 bank accounts (approx. $471,500). In addition to this, the authorities have also shuttered over 10 real estate properties worth over €2.5 million (approx. $2.8 million).

Other confiscated assets include 18 vehicles, 4 shotguns, and numerous encrypted electronic devices. Not counting luxury items such as cigars valued at over €622,000 (approx. $696,600), handbags exceeding €230,000 (approx. $257,600), and high-end watches and wines.

What’s interesting is that the group advertised its parallel banking structure on social media under the guise of a legitimate remittance provider.

The authorities have noted 32 money transfers that the group conducted in the last three months, valued at over €5.5 million. A singular crypto wallet reportedly acted as a transfer hub and handled over €21 million euros ($23.5 million) from 2022 through late 2023.

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Europe’s Growing Crypto Laundering Problem

Spain, in recent years, has witnessed several high-profile cases of fraud, misappropriation of seized digital assets and crypto laundering from the proceeds of cybercrime and drug trafficking.

This latest investigation is a part of a broader crackdown on crypto-related crime by European agencies and follows other similar cases such as the Marbella scandal from earlier this month, where a court clerk allegedly embezzled €19 million in seized digital assets. Furthermore, European authorities also raided eXch, a former crypto exchange that operated without requiring Know Your Customer (KYC) verifications and was implicated in laundering illicit funds.

While the Spanish authorities have not disclosed the names of the individuals arrested, they have emphasised that the group’s network sophistication and reach make it one of the most advanced money laundering operations encountered in Europe to date.

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Key Takeaways

• Europol dismantled a transcontinental crypto laundering syndicate that laundered at least €21 million of illegal funds across Europe, China, and the Middle East
• Authorities have arrested 17 individuals, predominantly of Chinese and Syrian nationalities
• Authorities have emphasised the crypto laundering operation as the most sophisticated instance of money laundering in the EU to date