NSW Police have busted up a money laundering syndicate that was using bitcoin to move ill-gotten cash overseas.
Last week, cybercrime detectives arrested six people for their alleged involvement in the group that was depositing cash into legitimate bank accounts around the country and exchanging it for cryptocurrency.
Head of the NSW Police Cybercrime Squad, Detective Superintendent Matt Craft said the investigation began when police noticed some “curious transactions” on cryptocurrency blockchains.
“We observed some transactions – large sums of money being exchanged for cryptocurrency – and started to work back from there,” he told Information Age.
“We wanted to know who these people are making these transactions and why. So, we followed the money.”
Teaming up with the Australian Federal Police (AFP) and financial crimes agents from AUSTRAC, detectives started piecing together information about the cryptocurrency money-laundering syndicate and launched Strike Force Curns.
In February, the operation made its first arrest when police pulled over a man in Sydney’s inner-west and found $1 million in cash sitting in his car.
Officers then searched his home, seizing supply quantities of methamphetamine and cocaine along with mobile phones, a laptop, storage drives, and more cash.
Police alleged the man was directing another group of people to launder nearly $5.5 million in cash by converting it into bitcoin and parking the coin in wallets located overseas.
Last Wednesday, detectives arrested five women and a man in Sydney for their involvement, charging the six with offences relating to money laundering and participating in a criminal group.
Superintendent Craft told Information Age the money launderers primarily used bitcoin – instead of privacy coins like Monero – because of its ubiquity on digital currency exchanges, but bitcoin is far from being untraceable.
“Unlike your bank account where transactions are private, the blockchain is a public ledger – every transaction is visible,” he said.
“It’s important we build up particular skillsets and have police who are specially trained to understand cryptocurrencies.”
Cryptocurrency exchanges must be registered with AUSTRAC and comply with anti-money laundering regulations such as 'Know your Customer' requirements.
In 2019, a Melbourne man was arrested for operating an unregistered bitcoin ATM in Melbourne.