Poland: 337 million zlotys of crypto scams laundered into fake bullion, nine arrests

Ingots that never existed. Monday October 19, Poland announced the dismantling of a money laundering network. The border guards acted together with the domestic security agency ABW and the central office for combating cybercrime. The network has transferred more than 337 million zlotys, or nearly 80 million euros at the current rate. The money came from crypto scams: fake investment platforms and fake investments in cryptocurrencies. The services arrested nine people, seven of whom are in pre-trial detention. The crackdown falls five days after the signing of the European protocol in Strasbourg. This text extends the powers of freezing and confiscation to cryptos.

Crypto laundering in Poland: kantors and gold on paper

The mechanism takes place in two stages. Victims believe they are investing on a trading platform or in a crypto product. They send their money. The network must then give it a presentable origin. This is done through kantors, these exchange offices present on every street corner in Poland. It also relies on gold purchases which only existed on account. A transaction in a metal that no one delivers justifies one transfer, then another. The trace ends up disappearing. In total, the border guards' press release puts the transactions at more than 337 million zlotys. This amount corresponds to the volume laundered, not the amounts seized.

The group operated in Warsaw, Lublin, Wrocław, Katowice and Gdańsk. A 34-year-old Ukrainian was its leader. He gave the orders. He also decided on the receipt of cash and its circulation in Poland and abroad. Investigators detained eight Ukrainian nationals (including three women) and a Belarusian. The searches targeted homes, offices and kantors. They led to the seizure of gold and cash worth more than a million zlotys. Investigators also took away computers and telephones. On the location of the arrests, the press releases diverge a little. The border guards talk about Warsaw, the ABW also mentions Łódź and the Lesser Poland Voivodeship. The Łódź Regional Prosecutor’s Office is leading the investigation into this crypto laundering.

Nine suspects, up to 15 years in prison: what the network risks

The court remanded six suspects in custody for three months and a seventh for two months. The last two remain free on bail. They are prohibited from leaving the territory and are subject to police control. All face up to fifteen years in prison, according to the ABW. The services have not released any names. They gave neither the number of victims nor their nationality.

The case is a textbook case for European crypto investigators. The network has been laundered off-blockchain, with gold and cash that on-chain analysts never see passing through. The 337 million zlotys represent approximately 1,100 bitcoins as of Tuesday. None of them needed to go through a blender. Border guards from Warmia-Masuria, on the border with Kaliningrad, carried out the operation. They worked with the CBZC in Łódź and the ABW branch in Gdańsk.