Europol has completed an operation that dismantled an underground “cryptobank” laundering millions of euros through non-bank financial systems known as “hawala.” The total amount of illegal funds exceeded $23 million, and the value of seized assets amounted to over $3.5 million.
This is reported by Business • Media
Uncovering the Criminal Network
European law enforcement agencies discovered a criminal banking network that laundered over 21 million euros ($23 million) using cryptocurrencies and informal money transfer systems. As part of the special operation, 17 individuals were arrested in countries such as Spain, Austria, and Belgium.
According to the report, this criminal network offered parallel banking services, including cash collection, courier transportation, and cryptocurrency-to-cash exchanges. During the searches, the following items were seized:
- approximately $229,600 in cash;
- $204,960 in cryptocurrencies;
- 18 luxury cars worth over $232,000;
- 10 properties valued at over $2.8 million;
- elite cigars estimated at approximately $701,000;
- luxury bags worth around $259,000.
The total value of the seized assets exceeded $3.5 million. The operation was conducted with the support of Europol, which funded the travel of three Spanish investigators to Belgium and Austria. Additionally, four more Europol agents were sent to Spain.
Mechanism of the Network’s Operation
According to the investigation, the criminal group operated through two main factions: Chinese nationals were responsible for cash collection in Spain, while Arab nationals handled international money transfers. The scheme was modernized by integrating cryptocurrencies into the traditional “hawala” system—an informal financial network that allows for the transfer of funds without the actual movement of money.
“Hawala is an Arabic term that means ‘transfer’ or ‘remittance.’ The system allows for money transfers without traces in traditional banks,” explained IMF senior economist Mohamed El-Korchi.
In this system, transfers were carried out through so-called “hawaladars”—intermediaries who transmitted funds between countries without the movement of physical cash. The clients of the criminal scheme were primarily residents of the Middle East and mainland China.
The uncovering of this network occurred against the backdrop of discussions in the European Union regarding the possibility of strengthening legislation related to tracking cryptocurrency transactions.
“The EU is exploring the possibility of storing data on senders and recipients of funds, which could also extend to cryptocurrency asset providers,” stated Ireland’s Minister for Finance Paschal Donohoe.