Europol Busts ‘Hawala Banking’ Network Cashing Crypto for Criminals

European authorities have dismantled the secret banking network that has been operating more than $ 23 million (21 million euros) using cryptocurrencies siphonated from organized criminal groups across Europe. Most groups are also involved in the smuggling of migrants and drug trafficking, authorities said.

EU agencies for cooperation for law enforcement or Europol, described in detail in a report published last week that at least 17 people related to money washing and a criminal banking ring were arrested in operations across Spain, Austria and Belgium.

Ring activities included “parallel banking services, illegal banking Hawala, money collection, cash services and a Crypto Crypto exchange services,” Europol reported.

These arrests come while the European Union considers monitoring the transmission of cryptocurrencies, applying its current laws against money laundering.

The EU is looking for ways to do this by recording “information about sender and recipients”, in such a way that this can be applied “to the providers of the cryptocurrency service”, according to Paschal Donohoe, the Minister of Finance in Ireland.

The modern ‘Hawala’ system

The authorities allegedly seized approximately $ 229,600 in cash, $ 204,960 in cryptocurrencies, 18 luxury vehicles worth more than $ 232,000, 10 real estate worth over $ 2.8 million, high cigars worth about $ 701,000, and luxury handbags estimated to be valid at least 259 000 USD.

Europol claims he funded three Spanish investigators who went to Belgium and Austria, and two other Europol agents were sent to “support the field”. In Spain, two more special agents are allocated.

Chinese and Syrian nationals were later identified among those involved in surgery made earlier in January, and their clientele, which is said to be primarily based in the Middle East and continental China.

The criminals allegedly acted through two major faction: Chinese nationals managing domestic money in Spain; And Arab nationals dealing with international transfers, modernizing the traditional “Hawala system” by integrating the crypto.

The Hawala system is a system of informal funds transmission (IFT) that allows funds to move from one person to another without physical movement of money, according to Mohammed El-Qorchi, a higher economist of the International Monetary Fund (IMF).

Hawala means “transfer” or “wire” in Arab bank jargon, explains El-Qorchi. Networks that facilitate such services are informally called “hawaladari”.

The Spanish media Olive Press was first described as a “mafia crypto bank”, a mark later adopted due to similarity with mafia operations.

Decrypt reached for Europol to confirm that and what specific cryptocurrencies were involved.

Edited Stacy Elliott.