Crypto Money Laundering Operation

Spanish law enforcement, in collaboration with Tron, Tether, and TRM Labs, has frozen $26.4 million worth of cryptocurrencies linked to a pan-European money laundering operation.

The operation involved cooperation with the T3 Financial Crimes Unit, an initiative launched in August 2024 and supported by the three blockchain firms.

The investigation relied on police surveillance to identify the criminal organization. Crypto wallets connected to illicit money laundering activities were identified through Know Your Customer (KYC) data from service providers. This represents the largest coordinated freeze operation conducted by the T3 Unit, adding to the $126 million recorded in its debut year.

Spanish Guardia Civil official: “This organization moved millions across borders, using both cash and crypto to help criminal groups launder their profits.”

Tron’s security efforts have reportedly reduced illegal transactions on its blockchain by up to $6 billion. According to TRM Labs, 49% of Tron’s illegal activities are linked to sanctioned entities, while 32% are tied to blacklisted funds.

Despite this, Tron remains the leading blockchain for illicit transactions, with 58% of such activities occurring on its network. Additionally, Tether’s USDT is the most commonly used asset in criminal activities.

Money Launderers Seek Alternatives

The use of centralized stablecoins like USDt and Circle’s USD Coin to freeze funds associated with criminal activities is a well-established practice. Stablecoin issuers have built-in mechanisms to block transactions linked to illegal activities.

Tether CEO Paolo Ardoino: “Let this be a clear warning — criminals who attempt to misuse Tether will get caught.”

In November 2023, Tether froze $225 million in USDT linked to pig butchering scams — fraud schemes involving coercion and relationship-building to swindle victims — following a U.S. Department of Justice investigation.

Southeast Asia has become a hub for such scams, often run by criminal syndicates. Victims of these operations include individuals who have been kidnapped and forced into scam operations at resorts.

Pig butchering syndicates reportedly launder their proceeds through a dark web marketplace called Huione Guarantee, which had once relied heavily on Tether. To avoid frozen funds, the platform launched its own stablecoin in September, according to security firm Elliptic.

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Southwark Crown Court in London sentenced a woman to prison for laundering bitcoins linked to a billion-dollar investment scam, Bloomberg reports.

Jian Wen, 42, who has dual citizenship, was sentenced to six years and eight months in prison for laundering 150 BTC worth approximately $10.4 million. The bitcoins were part of a broader investment fraud operation in which authorities seized 61,000 BTC, worth about $4.22 billion, and are thought to be part of a broader $5.6 billion scheme.

Wen claims that he laundered these funds on behalf of a Chinese woman between 2017 and 2022, and states that this woman was the “brains” of the operation. Wen also says he did not know the true source of the funds and the court did not accuse him of participating in the broader fraud, Bloomberg adds. Before starting this job, Wen worked as a food delivery worker.

Bitcoin traded at $69,077.30 as of 18:25 UTC on May 24. According to price data, the token has risen by 3.04% to $2,035 in the last 24 hours.

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