Germany closes 47 crypto exchanges over money laundering concerns

German authorities have shut down 47 cryptocurrency exchanges as part of an operation to target illegal money laundering activities.

According to a BKA press release, the operation, led by Germany’s Federal Criminal Police and the Central Office for Combating Internet Crime, targeted platforms that allow users to trade traditional currencies and cryptocurrencies without verifying their identity.

These exchanges enabled trading without following “know your customer” protocols, a set of rules that require users to verify their identity before making financial transactions.

By bypassing this verification, exchanges allowed users to trade cryptocurrencies like Bitcoin (BTC) or Ethereum (ETH) quickly and anonymously. According to the BKA, criminals often use such platforms to hide the source of money obtained through ransomware attacks or illegal activities such as selling drugs on the dark web.

On August 20, German authorities conducted a comprehensive anti-money laundering operation, seizing 13 crypto ATMs and approximately $28 million in cash from 35 locations across the country. The raids, led by financial regulator BaFin, targeted machines that lacked the necessary licenses and posed significant money laundering risks.

Germany’s relationship with crypto crime

The shutdown of these services is part of a broader effort to disrupt the infrastructure that supports cybercrime. Authorities were able to secure user and transaction data from the exchanges, which could be valuable for future investigations. This data could help identify criminals laundering money using these services.

The operation follows previous actions by German law enforcement, such as the seizure of the ChipMixer platform, which was involved in €90 million worth of cryptocurrency laundering in 2023. Authorities have also targeted other cybercrime networks, including malware operators, in recent years.

In June, the BKA began transferring around 50,000 BTC it had seized from people who ran the notorious pirate movie site Movie2k.to in 2013, setting the stage for a very eventful summer for Germany and the cryptocurrency industry.

Germany transferred and sold all of its Bitcoins for about a month between June and July, causing the asset’s price to drop.