Spain: Drug Gang Who Laundered $10 Million With Bitcoin ATMs

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Bitcoin ATMs Spark Money Laundering Debate
One criticism that Bitcoin’s cynics have for the cryptocurrency is that it can be used for money laundering. In one recent case, this point was entirely true.

According to Bloomberg, in April and May of this year, the Civil Guard branch of Spanish police managed to take down a money laundering operation that purportedly made good use of Bitcoin ATMs. The eight individuals involved in this circle purportedly used nine different vendors to wire over $10 million to drug dealers and traffickers.

A report from the Civil Guard suggests that to launder a portion of the money, those involved purchased cryptocurrency ATMs from “unsuspecting trading platforms” and planted the machines in legitimate-looking locations. Then, the group’s runners would deposit the cash they wanted to launder into these machines, obtain a coupon for some cryptocurrency, and redeem it on certain exchanges for Bitcoin, which could then be sent to the drug lords.

Somehow, the European Union and Spanish anti-money laundering rules and infrastructure did not detect any of these transactions at first, even those to the involved crypto asset exchanges. Hence, Spanish police have brought the issue of Bitcoin ATMs to the table of the anti-money launderers.

What’s interesting is that a soon-to-be-implemented European Union legislation regarding cryptocurrency’s use in illicit financial transactions does not mention Bitcoin ATMs, but instead focuses on cryptocurrency exchanges and digital asset custodians.


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