According to the latest news, the government of Germany has reportedly halted the activities of 47 crypto exchanges accused of setting up cyber frauds.
The exchanges, based within the country, did not comply with KYC laws regarding financial transparency and facilitated money laundering.
At the moment, however, the quantity of assets seized from platforms not compliant with German regulations is not known.
Let’s see all the details below.
Computer fraud: Germany shuts down 47 crypto exchanges
Yesterday, the German government announced the forced closure of 47 crypto exchanges presumably linked to illicit activities and cyber fraud carried out in Germany.
The news came directly from the office of the German Attorney General in Frankfurt am Main and the country’s Federal Criminal Police (BKA).
The maxi operation was conducted after the same authorities detected violations of registration obligations KYC and facilitation of money laundering.
These platforms would not have intentionally implemented the necessary recognition systems in Germany, opening the doors to fraud and illegal transactions.
This type of setup has often been exploited in the past by various cybercrime groups, such as ransomware operators and traders on the darknet.
As stated in the BKA press release, they:
“allowed exchange transactions without going through a registration process and without checking proof of identity (the so-called know-your-customer principle)”.
Among the crypto exchanges that will now have to answer for the frauds committed, we find the exchanges Xchange.cash, 60cek.org, Baksman.com, alongside other smaller platforms.
One of these was active even since 2012 while others had been launched more recently.
The German government has now placed a seal over their respective websites, preventing their free use.
At the same time, the leaders of these organizations have not been able to be identified, as they often do not reside in Germany.
Sometimes the people who manage the exchange are in places where these activities are even tolerated or even protected.
The German authorities have reported that it will be almost impossible to prosecute them criminally, unless they set foot in the country. Instead, the federals are focusing on weakening the underlying infrastructure and combating the connections that favor these illegal traffics.
Other potential crypto sale opportunities for the German government after Mt. Gox
After the closure of these 47 crypto exchanges, the next move by Germany could be to seize the digital assets within them.
For the moment, no confiscation has been detected, with the exchanges that have only seen their IT activities in the country interrupted.
In the coming weeks, it is possible that the BKA will reach the direct perpetrators of financial fraud, taking into custody the crypto held at the exchanges.
This scenario will then inevitably lead to the liquidation of the same cryptocurrencies, just as happened a few months ago.
At the beginning of the year, in fact, the German government had seized as many as 49,857 bitcoin (BTC), worth 2.1 billion dollars, from a website that was shut down in 2013.
In that case, the platform, called Movie2k.to, had violated the Copyright Act and was forced to shut down with the consequent appropriation of the crypto under management.
The German agency decided to sell all these tokens in bulk in July, triggering panic within the cryptographic financial markets.
It is worth noting how the drop was accompanied by the simultaneous refunds from the defunct crypto exchange Mt. Gox.
In mid-July, Germany had definitively sold all the reserves in Bitcoin, previously seized.
German government finally sold off all of it's Bitcoin. Soon ETH ETF will go live and we can finally continue with UpOnly. pic.twitter.com/RW3FPLBBoc
— ImNotTheWolf (@ImNotTheWolf) July 13, 2024
Now in this case it is unlikely that the government will seize a similar amount of crypto asset, as the exchanges are small in size.
In any case, such news should not this time trigger a sell off of crypto assets. Rather, the closure of these exchanges could serve as a deterrent for the implementation of fraud by other exchanges.
Problems for the world of crypto exchange: the BingX platform hacked
After the latest blow from Germany against some platforms accused of computer fraud, here comes another hit for the world of crypto exchange.
On the other side of the world, in Singapore, the well-known exchange BingX was recently breached, leading to the loss of nearly 43 million dollars
On-chain data suggests that 13.25 million dollars in ETH, 4.4 million USDT, and 2.3 million BNB have been stolen.
The news was spread by the analyst “PeckShield Alert” who noticed two distinct waves of hack attacks.
In the first, the thieves took away about 26 million dollars, while in the second they seized another 16.5 million dollars.
The competent Asian authorities are examining the case, trying to reconstruct the flow of the drained crypto.
These news end up putting the sector of exchange centralizzati (CEX) in a bad light where government sanctions and thefts risk driving away the masses.
The multiple disasters that occurred in the past with Mt. Gox, FTX, The Rock Trading, WazirX, and many others, the crypto community is losing trust in centralized counterparts.
#PeckShieldAlert #BingX has been hacked with loss of ~$26.68M worth of cryptos. The stolen funds mainly outflowed from #Ethereum & #BNBChain.
The hacker has already swapped most of the stolen assets for ~4,526 $ETH & 7,864.7 $BNB.
Check the details of stolen assets here:… pic.twitter.com/4m2OfxTpsV
— PeckShieldAlert (@PeckShieldAlert) September 20, 2024
Fortunately, in this case, the loss of BingX does not cause particular damage to the company, which will be able to continue operating independently, even in Germany.
All functions of the exchange should return to operational status within the next 24 hours.
According to what was reported by Vivien Lien, CEO of the company:
“The total loss is minimal and manageable. This incident will not affect our ongoing business activities. Trading services continue as usual. Withdrawals and deposits are temporarily delayed and should be restored within no more than 24 hours.”
