Germany seizes 47 crypto exchanges

[CreepyUncleJoe]

German law enforcement seized 47 cryptocurrency exchange services hosted in the country that facilitated illegal money laundering activities for cybercriminals, including ransomware gangs.

https://www.bleepingcomputer.com/news/security/germany-seizes-47-crypto-exchanges-used-by-ransomware-gangs/


The complete list of seized exchanges: https://www.finalexchange.de/en


Many legitimate users were using those exchanges because they are listed on BestChange and were actually performing AML and KYC procedures in cases of suspicious transactions.

[Darker45]

They swooped on all 46 cryptocurrency exchanges at once and seized them? Interesting! Have they built a strong case against each one of them? Or are they just implementing a blanket drive against crypto exchanges? Aside from having a government that's largely cold to Bitcoin, I wonder what triggered this specifically.

Why don't they do the same to their central bank and commercial banks. 99.9% of the underground economy is fueled by fiat.

Anyway, this is but another reminder of the reason why Bitcoin exists and why centralized Bitcoin-related services are an antithesis to it.

[xtests]

Press release on BKA website: https://www.bka.de/DE/Presse/Listenseite_Pressemitteilungen/2024/Presse2024/240919_PM_finalexchange.html

The funny part is prosecutors saying the platforms allowed users to exchange cryptocurrencies without following applicable AML/KYC regulations while all of them pretended to have strict AML/KYC policies on their sites which allowed them to scam their users for many years by seizing coins due to high risk scores. This is why I always recommended to many of such to stop doing so (both on this forum and directly), because independently of the shiny AML/KYC policies written on their websites they're still operating illegally due to lack of company registration and/or appropriate license. All of them used AMLBot and most of them were WhiteBIT resellers.

At least 5 of these websites when I used them in the past seized my BTC from coinjoins due to high risk scoring by the platform they use (AMLBot), with Bestchange supporting their decision to not return coins to me when I complained there. Not significant amounts but I still considered them scammers.

All of their reps and Bestchange admin personally were for years convincing the general public that all these exchangers are following FATF and FATCA rules (that never really applied to any of them), which seemed to be proven otherwise by BKA.

This is yet another lesson for Bestchange and their affiliates that pretending to have AML/KYC and being enemy of Bitcoin promoting dirty/clean coin separation while operating anonymous websites isn't a very good business model. You are either being honest with everyone or you just better don't do business at all. Simple.


On additional note, one of them even has official thread: EasySwap.biz - fresh exchange format

Here are some old screenshots from Bestchange with user complaints (in russian) of Xchange[.]cash, Bankcomat[.]com, Prostocash[.]com, YChanger[.]org illegally seizing funds that eventually were switched from red to neutral by Bestchange:



If you open each Bestchange review page of almost any exchanger from BKA's list, you will find a lot more of these.

[hugeblack]

They swooped on all 46 cryptocurrency exchanges at once and seized them? Interesting! Have they built a strong case against each one of them? Or are they just implementing a blanket drive against crypto exchanges? Aside from having a government that's largely cold to Bitcoin, I wonder what triggered this specifically.

These services are mostly run by one entity through a custom script and some are hosted on the same shared IP address so it is easy to stop them all at once but they will continue to generate more transactions in a short time.

Press release on BKA website: https://www.bka.de/DE/Presse/Listenseite_Pressemitteilungen/2024/Presse2024/240919_PM_finalexchange.html

It is better to avoid platforms that do not give you the option to refund payments if you do not want to send your data.

[Zlantann]

Many legitimate users were using those exchanges because they are listed on BestChange and were actually performing AML and KYC procedures in cases of suspicious transactions.

It's just confusing that you just know the party to believe until you have proof. The government might be clamping down on these exchanges because they want to give the industry a bad name to reduce crypto adoption. In some cases, the government might want to use it as a form of revenue by collecting huge fines before they will be allowed to operate.

But some of these exchanges do lots of bullshit. They have special customers that use their platforms to engage in criminal activities. Normal customers will be mandated to go through strict KYC while these special clients are given preferential treatment because they pay higher service charges. Some of these exchanges are not fully registered and also break the crypto laws of the country.

[Knight Hider]

Many legitimate users were using those exchanges because they are listed on BestChange and were actually performing AML and KYC procedures in cases of suspicious transactions.

Performing KYC on criminal websites is giving criminals your personal data. Assume your ID data to be sold on the dark web now.

[dkbit98]

If they can seize 47 exchanges at the same time that probably means that all this exchanges have been operated by the same group of people and they probably used the same servers.
I wouldn't trust most of this exchanges in the first place, especially not for larger a amounts, but now all personal information of customers is most likely leaked.

Here are some old screenshots from Bestchange with user complaints (in russian) of Xchange[.]cash, Bankcomat[.]com, Prostocash[.]com, YChanger[.]org illegally seizing funds that eventually were switched from red to neutral by Bestchange

Nothing new about that.
We spoke several times about terrible rating system of bestchange, and it looks like they deceived everyone when they claimed they are working on improving it.
Months and years probably passed saince than and nothing changed with bestchange rankings. 

[robelneo]

Many legitimate users were using those exchanges because they are listed on BestChange and were actually performing AML and KYC procedures in cases of suspicious transactions.

Performing KYC on criminal websites is giving criminals your personal data. Assume your ID data to be sold on the dark web now.

This is very alarming and there's a possibility that some of the users are already referred because they are listed on review sites and directories, but why now, They should have taken swift action not to the point that these exchanges already have hundreds of thousands of traders who are not aware that they are trading in a bad exchanges.
The key point here is to always do your research and not store your funds on exchanges, but unfortunately, in this case, many of its traders information is at risk.

[webbed]

This is total BS!!

I’ve used several of these exchangers listed on BestChange, and they’re practically impossible to use for money laundering. For every suspicious transaction, they ask for documentation. They use chain analytics tools and even block transactions from gambling platforms. Just look at the complaints from hundreds of users who are upset about sudden KYC on BestChange! Once, I had to go through KYC and send screenshots when I tried to exchange LTC that I withdrew from DuckDice!
According to German police, cybercriminals have used them. No, I’m not a criminal, just a degenerate gambler.

[examplens]

Here are some old screenshots from Bestchange with user complaints (in russian) of Xchange[.]cash, Bankcomat[.]com, Prostocash[.]com, YChanger[.]org illegally seizing funds that eventually were switched from red to neutral by Bestchange

Nothing new about that.
We spoke several times about terrible rating system of bestchange, and it looks like they deceived everyone when they claimed they are working on improving it.
Months and years probably passed saince than and nothing changed with bestchange rankings. 

The very bad rating system on Bestchange showed all its shortcomings this time. Now I went through several feedback pages from seized exchanges, and not one of them has red feedback, even though there are many complaints about frozen user funds.

This is total BS!!

I’ve used several of these exchangers listed on BestChange, and they’re practically impossible to use for money laundering. For every suspicious transaction, they ask for documentation. They use chain analytics tools and even block transactions from gambling platforms. Just look at the complaints from hundreds of users who are upset about sudden KYC on BestChange! Once, I had to go through KYC and send screenshots when I tried to exchange LTC that I withdrew from DuckDice!
According to German police, cybercriminals have used them. No, I’m not a criminal, just a degenerate gambler.

Therefore, before using any exchange, always check their KYC and refund policy. Many instant exchangers do not even have their liquidity funds but rely on a third party, which is usually Changenow. There is almost guaranteed freezing of funds and a very long, often impossible path to refund.

[hugeblack]

I’ve used several of these exchangers listed on BestChange, and they’re practically impossible to use for money laundering. For every suspicious transaction, they ask for documentation. They use chain analytics tools and even block transactions from gambling platforms.

The German government shutdown may have other reasons such as political reasons and others, as the definition of money laundering varies between countries, and sometimes simply due to non-compliance with regulations in the specific country.

What confuses me is that the huge number of transactions and users, an average of more than 10k-500k transactions, is not considered a small number for such services. I thought that the average of its transactions was a few hundred transactions.

[NotATether]

I've only heard of and used one of these, Prostocash. I think I used it like 3 times in total, and it was for sending money from crypto to a bank account a *very* long time ago.

I haven't had any complaints about AML during that time, and I was sending all sorts of coins from mixers, Freebitcoin, Binance (received from a friend - I don't have a Binance account) and others.

Since it looks like it's for lack of licensing they were taken down, then my conclusion is that we have to use either the no-KYC ones (and don't pretend to be compliant), or the ones which actually have licenses and do have AML checks.

I guess the task force has my email address now among other things 

[CreepyUncleJoe]

It seems to me that the German police seized only the servers on their own initiative, without international cooperation. Most of the domains show a Cloudflare Host Error page, which suggests that the domains are still under the control of the owner or owners. It appears that there’s one organization behind all these exchanges, as nearly all the domains are registered with NameCheap and use Cloudflare.

[examplens]

Since it looks like it's for lack of licensing they were taken down, then my conclusion is that we have to use either the no-KYC ones (and don't pretend to be compliant), or the ones which actually have licenses and do have AML checks.

Interestingly, they were accused because they did not respect the AML rules and approved transactions without KYC, and at the same time, there were many accusations from users due to frozen funds because they did not meet the AML criteria.
Since they were operating without a license, the AML failure was just an excuse to confiscate users' coins.

[DaveF]

...the AML failure was just an excuse to confiscate users' coins.

Hasn't that always been the case?
You failed our super secret process, now we keep your money. We can't tell you why because it's a secret.

Figure there will be more coming, since it does look like Germany did this alone you have to figure the servers were in a German data center.
Lets see if any servers in any other locations get seized.

And the funny part at least to me is the finalexchange.de site is hosted on Amazon servers in the US.

-Dave

[dkbit98]

This is total BS!!
...

So you registered a brand new account just to tell us that and to defend bestchange?  

The very bad rating system on Bestchange showed all its shortcomings this time. Now I went through several feedback pages from seized exchanges, and not one of them has red feedback, even though there are many complaints about frozen user funds.

They deserved to be criticized about this, and some would say they even lied about improving rating system, when they actually didn't improve anything with rating for years.
Eternal improving of rating system without any visible results.

[stompix]

What confuses me is that the huge number of transactions and users, an average of more than 10k-500k transactions, is not considered a small number for such services. I thought that the average of its transactions was a few hundred transactions.

I'll take that with a grain of salt since:

It is alleged that one of the seized cryptocurrency exchanges, Xchange.cash, had been active since 2012, facilitating nearly 1.3 million transactions for 410,000 users.

Yeah, all fine and credible, except for the thing that the .cash tld domain was available only from 2014, so....

I’ve used several of these exchangers listed on BestChange, and they’re practically impossible to use for money laundering. For every suspicious transaction, they ask for documentation. They use chain analytics tools and even block transactions from gambling platforms. Just look at the complaints from hundreds of users who are upset about sudden KYC on BestChange! Once, I had to go through KYC and send screenshots when I tried to exchange LTC that I withdrew from DuckDice!

You're mistaken real AML/KYC policies with demand from those exchanges in attempts to confiscate your funds, I remember how one such moron was denying a customer his funds because the address was tagged, that address was in fact crypto.com hot wallet!

[Best_Change]

To clarify the situation, we would like to add that we did not receive any requests on this issue. We remained as uninformed as the administrators of the mentioned exchangers.

There are also no official data on what specifically led to the exchanger’s closure, as well as  what specific operations may  have seemed suspicious to the BKA when these operations were carried out, and if any AML procedures were performed on them. Complete obscurity, except for the caustic remarks from the representatives of the German authorities, we did not see anything substantive.

We also confirm that on the monitor, we immediately disabled the services listed on this resource until the situation is clarified, as it is unclear who and in what form has access to the hosting of these exchangers.

The cryptocurrency community has long been divided into two camps - some criticize exchangers and exchanges for poor compliance with AML legislation, while others criticize them for too harsh measures to comply with AML. Iin particular, exchangers are often hated for selective KYC procedures which are required in cases when a processed transaction has a high percentage of risk scoring. (even in this topic there is a representative of this camp).

Finding a balance between these polar positions is difficult not only for small exchangers, but also for large international exchanges, which are constantly criticized at the state level in different countries and receive multi-million dollar fines for non-compliance with far-fetched norms from the old financial world.

All of their reps and Bestchange admin personally were for years convincing the general public that all these exchangers are following FATF and FATCA rules (that never really applied to any of them), which seemed to be proven otherwise by BKA.

The accusation is too emotional, taking into account that its details are still unclear. Who and for what transactions were found guilty? Do you already know this? In the eyes of law enforcement bodies, almost any exchanger will conduct insufficiently strict AML/KYC procedures, this is their advantage.

But it is precisely because of critics like you that exchangers have to find a balance between strict checks and their complete absence. The serviceslisted in the publication conducted checks selectively, only when risk score was high, which in a certain sense can be regarded as insufficient measures to counter money laundering, especially when marking some wallets retroactively, as often is the case. In addition, it may be a question of very old transactions, when no one, including international crypto exchanges, conducted AML assessments at all, we need to wait for the details of the accusation, and then accuse someone of double standards.

[examplens]

The cryptocurrency community has long been divided into two camps - some criticize exchangers and exchanges for poor compliance with AML legislation, while others criticize them for too harsh measures to comply with AML. Iin particular, exchangers are often hated for selective KYC procedures which are required in cases when a processed transaction has a high percentage of risk scorinselectivg. (even in this topic there is a representative of this camp).

It depends on who and how they look at it. Obviously, most of you* instant exchangers have your policy, which is very easily abused. That's why we now have 47 seized exchangers.

What certainly forces most exchangers into violation is the freezing of user funds. I'm sure none of them have a license for such a thing. But you adapted that rule to yourself* under the pretext of AML because it suits you*.
Many exchanges on your service have accusations of seized user funds, it may seem to you that it has been resolved, but it is not. Don't you think that the investigation was launched after numerous complaints about the illegal confiscation of users' funds?

* - I am deliberately including you in the group of instant exchangers, because you directly depend on them and the rules under which they work.

[Z-tight]

I’ve used several of these exchangers listed on BestChange, and they’re practically impossible to use for money laundering. For every suspicious transaction, they ask for documentation.

So unless the BKA is lying in their press release, what you say is bs. The services were seized because they failed to fully comply with AML and KYC laws, so if they didn't, how come they are so strict in confiscating customers funds and rarely ever returning it back to them. It can only mean one thing, and that is that this services used the excuse of 'suspicious tx's' to steal funds from their customers and keep the money for their own benefits.