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33 money laundering crypto crims targeted worldwide in 3 separate cases

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Law enforcement officials from around the world hav taken action against a major transnational money laundering operation involving cryptocurrency.

On Oct. 15, Europol announced a successful operation across 16 countries that resulted in the arrest of 20 individuals suspected of working for the QQAAZZ criminal network.

The organization is accused of laundering tens of millions of euros for top cybercriminals since 2016. The funds are allegedly transferred through international bank accounts, shell companies based in Poland and Bulgaria, and via cryptocurrency mixing services.

Around 40 homes were searched across the United Kingdom, Spain, Italy, Latvia, and Bulgaria as part of “Operation 2BaGoldMule,” with arrests made in Australia, the U.S, the U.K, Portugal, Spain, Latvia, and Poland.

Bitcoin mining equipment was also seized in Bulgaria.

Map of participating countries and arrests: Europol

On the same day, a 40-year-old man was arrested in New Zealand for using cryptocurrency to launder more than $2 million for criminals. The man also laundered funds by purchasing luxury vehicles, including a Lamborghini and Mercedes G63.

The Auckland resident is now facing 30 charges, including allegations of obtaining $1 million in credit from a bank using deception. Six other New Zealanders were arrested in a series of raids and asset seizures across the country the previous day.

Oct. 15 also saw the U.S. Department of Justice unseal a superseding indictment charging six individuals for their participation in a conspiracy to “launder millions of dollars of drug proceeds on behalf of foreign cartels.”

The indictment alleges the individuals used casinos, front companies, cash smuggling, and bank accounts to launder money on behalf of drug syndicates. One suspect is also accused of planning to bribe a United States Department of State official using cryptocurrency, hoping the official would create fraudulent U.S. passports for him and his associates.



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New York authorizes first Yen stablecoin operator in the US

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New York has given the first authorization to a stablecoin backed by the Japanese Yen to operate in the U.S.

Per a Dec. 29 announcement, the New York Department of Financial Services has granted Japanese firm GMO-Z.com a charter to handle U.S.D. and Yen-backed stablecoins in New York. 

Given New York’s status as a global center, the NYDFS is the most prominent state financial regulator in the U.S. It is also one of the most aggressive. A pass to operate in New York often opens up the rest of the country. 

GMO’s charter is as a limited liability trust company rather than a full bank, the principle difference being in authorization to handle deposits. While a stablecoin operator typically needs the ability to hold reserves of the pegged asset, GMO’s charter limits its rights to hold other kinds of deposits not central to its ability “to issue, administer, and redeem” its stablecoins. 

The right to issue such non-depository charters has been a bone of contention between state regulators like the NYDFS and national banking regulators in the U.S. 

GMO president and CEO Ken Nakamura said: “We’re breaking ground with our move to issue the first regulated JPY-pegged stablecoin, which many see as a safe haven asset.” 

The NYDFS recently made changes to its famous BitLicense, including a conditional format that buddies up newly licensed firms with existing licensees. The first conditional BitLicense went to PayPal, facilitating the launch of its new crypto services earlier this fall with the help of longstanding licensee Paxos.