Spanish police busted 30 people suspected of using a 'crypto-currency' to launder money

A Bitcoin (virtual currency) coin is seen in an illustration picture taken at La Maison du Bitcoin in Paris July 11, 2014.  REUTERS/Benoit Tessier

Spanish police said on Wednesday they had arrested 30 people suspected of illegally distributing pay-TV content and of laundering the proceeds by investing in bitcoin “mining” centers for processing transactions in the digital currency, which use intensive computing power to generate more bitcoins.

The arrests took place across Spain, including in the cities of Madrid, Barcelona, Valencia, and Cordoba, the police said, according to Reuters.

Six bitcoin “mining” centers were seized in the raid, they added, after an investigation alongside Spain’s tax office that started as a crackdown on a scheme to illegally decode and distribute pay-TV content.

The proceeds were allegedly laundered through investments in banking products, luxury cars, as well as property and Bitcoin centers.

Police said the bitcoin-mining operations had also been fraudulently using vast amounts of electricity to keep their computing systems running.

They did not say how much money had been laundered through the bitcoin-mining operation but added they had for now seized 31,320 euros, or $34,903, worth of the currency as well as cash, motorbikes, and luxury cars and a small aircraft.

Bitcoin and virtual currencies like it have been put into use to launder money by a number of criminal organizations. 

Bitcoin money laundering virtual currency transactions

“Virtual currencies, such as the popular crypto-currency Bitcoin, are quickly evolving economic tools that attract [transnational criminal organizations] eager to exploit the often unregulated and decentralized virtual currency markets,” the US Drug Enforcement Administration reported in its 2015 National Drug Threat Assessment.

While the suspects in the Spanish case were laundering money through bitcoin “mining” centers, laundering efforts that use bitcoin to make purchases through legitimate sellers — online retailers, clothing chains, restaurants, and others — have grown more popular as the virtual currency has gained widespread use, the DEA said in its report. 

Virtual currencies have not replaced cold, hard cash in criminals’ wallets, however. Earlier this year, the European Central Bank announced that it would stop making the 500-euro note, in part because of concerns about how the note was being used in illicit transactions.

(Reporting for Reuters by Sarah White; Editing by Greg Mahlich)

SEE ALSO: ‘El Chapo’ Guzm├ín’s Sinaloa cartel was melting down its profits to sneak them out of the US

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