Germany has blocked 47 cryptocurrency exchanges that facilitate underground economic activity, sending a strong message to criminals that they have found the servers and all the data.

On September 19, the German Federal Criminal Police, the Frankfurt prosecutor’s office, and the cybercrime agency jointly shut down 47 cryptocurrency exchanges. The agencies accused the exchanges of deliberately facilitating the development of an “underground economy” for cybercriminals.

Specifically, the exchanges are accused of concealing the origin of proceeds from criminal activity on a large scale, by failing to fully comply with anti-money laundering legal requirements.

Details of 8 of the 47 cryptocurrency exchanges seized by German authorities. Source: German Government

Authorities say users on these exchanges include ransomware hackers, botnet operators and black market traders who use the services of the exchanges to convert proceeds from illegal activities into legitimate financial flows.

The websites of the shuttered exchanges now display a warning that reads: “We have found and seized their servers – including development servers, operations servers, and backup servers. We have their data – and therefore, we have yours. All transactions, registration information, and IP addresses. Our trail begins. See you soon.”

German authorities warn users of seized cryptocurrency exchanges. Source: German Government

However, authorities also admit that widespread prosecutions will be difficult and cannot be widely deployed because many perpetrators reside abroad, where they may be tolerated or even protected.

According to the authorities, one of the exchanges shut down was Xchange.cash, which had been operating since 2012 and had facilitated nearly 1.3 million transactions by 410,000 users. 60cek.org, Baksman.com, and Prostocash.com were among the other exchanges seized with large numbers of users and transactions.

Notably, the move comes after the German government sold nearly 50,000 Bitcoin (BTC), worth about $3.15 billion at current prices — in several transactions in June and July. The Bitcoin was seized from the pirated website Movie2k.to in 2020.