European authorities have dismantled a secret bank network that has washed more than $23 million (21 million euros) using codes siphoned from organized European criminal groups. Authorities said most groups were also involved in immigrant smuggling and drug trafficking.
The EU Law Enforcement Cooperation Agency, or Europol, is detailed in a report released last week, in which at least 17 people linked to money laundering and criminal banking rings have been arrested in operations in Spain, Austria and Belgium.
Ring’s activities included “parallel banking services, illegal Hawara banking, cash collection, cash delivery services, and cryptocurrency exchange with cash.”
These arrests come when the European Union is considering tracking cryptographic transfers by applying current money laundering laws.
The EU is looking for ways to do this by recording “data about senders and recipients of funds” “so they can be applied to crypto asset providers,” according to Ireland’s finance minister Paschal Donohoe.
Modern “Hawara” system
Authorities reportedly seized about $229,600 in cash, $204,960 in crypto, 18 luxury cars over $232,000 in 18 properties, over $2.8 million in 10 properties, about $701,000 worth of luxury cigars, and luxury handbags estimated to be worth at least $259,000.
Europol claims to have funded three Spanish investigators who went to Belgium and Austria, with two other Europol agents sent to “provide support on the ground.” Two more Europol special agents were deployed to Spain.
Chinese and Syrian citizens were later identified among those arrested in the operation executed in the beginning of January, with clients said to be based primarily in the Middle East and mainland China.
Criminals are reportedly active through two major factions. A Chinese citizen who manages Spanish domestic cash collections. And the Arab people modernize the traditional “Hawala system” by integrating cryptography and handle international transfers.
The Hawaii system is an informal fund transfer (IFT) system that allows funds to move from one person to another without physical movement, according to Mohammed El-Qorchi, a senior economist at the International Monetary Fund (IMF).
Hawaii means “transfer” or “wire” in Arabic bank terminology, explains El-Qorchi. Networks that promote such services are informally referred to as “Hawaladars.”
Spanish media outlet The Olive Press first described the operation as “Mafia Crypto Bank.” This is a label that was later adopted for similarity to mafia operations.
Decrypt contacted Europol to see what specific cryptography was involved.
Edited by Stacy Elliott.
Discover more from Earlybirds Invest
Subscribe to get the latest posts sent to your email.
