- German authorities seize data from non-compliant exchanges, shifting focus to disrupt.
- BKA targets exchanges for failing KYC checks, highlighting challenges in overseas operators.
- Authorities prioritize weakening illegal infrastructure over direct operator prosecution.
The German Federal Criminal Police Office (BKA) has announced enforcement actions against several crypto exchanges. With support from the Central Office for Combating Internet Crime (ZIT), 47 exchanges allegedly tied to criminal activities have been closed. This is due to failing to comply with mandatory identity and background checks on customers, commonly referred to as Know Your Customer (KYC) requirements.
The BKA’s press release on Thursday highlighted that platforms like Xchange.cash, 60cek.org, and Baksman.com, along with several smaller exchanges, were involved in these violations.One of these exchanges has been operational since 2012, while others launched recently.
Government Seizes Customer Data
The investigation led to the seizure of customer and transaction data. The BKA noted that many individuals behind these operations are located in regions where such activities are tolerated and protected.
This geographical challenge complicates prosecution efforts. It makes it difficult for German officials to bring offenders to justice. As a result, authorities are redirecting their focus to disrupting the infrastructure supporting these illegal activities. This is opposed to pursuing the individuals directly involved.
Bitcoin Linked to Previous Investigations
Earlier this year, the BKA seized nearly 50,000 Bitcoin, valued at $2.1 billion at the time, from operators of the defunct privacy website Movie2k.to. It was shut down in 2013 for copyright violations.
This significant asset seizure highlights ongoing efforts by the German authorities to dismantle networks involved in illegal financial activities. The agency sold the Bitcoin in July, causing notable market disruptions. The selling coincided with repayments by the collapsed bitcoin exchange Mt. Gox.
Germany Debates Over Digital Euro’s Privacy Concerns and Cash PreferencesWeakening Illegal Infrastructure
BKA has changed tactics because these exchanges operate cross-border. Instead, emphasis will be placed on the dismantling of fraudulent technology. Its goal is to disrupt emerging platforms that facilitate illegal transactions and operate with minimal regulatory oversight. This approach is designed to limit the capability of such exchanges. It aids them in going about their business without compliance with regulatory measures.
They also have the overall goal of minimizing the effect of such exchanges in the market. This is true as the BKA recent activities are in line with a major trend seen in the whole world.
