The German government has shut down nearly 50 crypto exchange for allegedly failing to implement adequate know-your-customer (KYC) procedures and measures to prevent criminal activity.
The German government has just shut down 47 crypto exchanges, accusing them of deliberately allowing an “underground economy” to flourish for cybercriminals, and is now turning its attention to users who are likely to commit crimes.
“These crypto exchanges deliberately concealed the origin of the illicit funds by failing to fully comply with legal requirements against money laundering,” according to a September 19 statement from Germany’s Federal Criminal Police Office, the General Prosecutor’s Office in Frankfurt, and the country’s Cybercrime Prevention Agency.
Authorities allege users of these crypto exchanges include ransomware criminals, botnet operators and black market traders who use the services to convert proceeds from crime into “legitimate” money.
Currently, the websites of the seized exchanges display a warning from the German government:
“We have found and seized the exchange’s servers – from development, production to backup servers. We have their data – and therefore, we have your data. Transactions, registration information, IP addresses,” the officials wrote.
“Our quest begins. See you soon.”
However, German authorities have suggested that widespread prosecution may not be possible because many of these criminals live in other countries.
One of the seized exchanges, Xchange.cash, is said to have been operating since 2012, processing nearly 1.3 million transactions for 410,000 users. 60cek.org, Baksman.com, and Prostocash.com were also among the exchanges that were shut down with high user and transaction counts.
Germany was once one of the world's largest holders of Bitcoin, until recently when the government sold nearly 50,000 Bitcoins — worth about $3.15 billion at current prices — across multiple transactions in June and July.
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