Busted: Spanish Drug Gang Who Laundered $10 Million With Bitcoin ATMs

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Bitcoin automated teller machines (ATMs) are becoming increasingly used in today’s world. As of the time of writing this, there exist over 5,000 of these machines worldwide, up from 1,000 in 2017. While most of them seem innocuous, sitting mostly unused at the corner of coffee shops and gasoline stations, a new report from Spanish law enforcement suggests that these cryptocurrency-selling ATMs cater too much to the money laundering crowd.

Cryptocurrency Adoption ATMs

Bitcoin ATMs Spark Money Laundering Debate

One criticism that Bitcoin’s cynics have for the cryptocurrency is that it can be used for money laundering. In one recent case, this point was entirely true.

According to Bloomberg, in April and May of this year, the Civil Guard branch of Spanish police managed to take down a money laundering operation that purportedly made good use of Bitcoin ATMs. The eight individuals involved in this circle purportedly used nine different vendors to wire over $10 million to drug dealers and traffickers.

A report from the Civil Guard suggests that to launder a portion of the money, those involved purchased cryptocurrency ATMs from “unsuspecting trading platforms” and planted the machines in legitimate-looking locations. Then, the group’s runners would deposit the cash they wanted to launder into these machines, obtain a coupon for some cryptocurrency, and redeem it on certain exchanges for Bitcoin, which could then be sent to the drug lords.

Somehow, the European Union and Spanish anti-money laundering rules and infrastructure did not detect any of these transactions at first, even those to the involved crypto asset exchanges. Hence, Spanish police have brought the issue of Bitcoin ATMs to the table of the anti-money launderers.

What’s interesting is that a soon-to-be-implemented European Union legislation regarding cryptocurrency’s use in illicit financial transactions does not mention Bitcoin ATMs, but instead focuses on cryptocurrency exchanges and digital asset custodians.

Vancouver Also Looking to Crack Down

Spain’s little tussle with a Bitcoin ATM-using criminal gang comes hot on the heel of Vancouver, Canada’s attempt to ban these machines, despite the city hosting the world’s first physical BTC machine. As reported by Blockonomi previously, Vancouver’s mayor, Kennedy Stewart, told City Council in May that all Bitcoin-selling machines should be banned.

Christine Duhaime, a Vancouver lawyer that has been instrumental in discussions regarding the QuadrigaCX debacle, spoke with The Star on the matter.

“Vancouver definitely has connections to, unfortunately, digital currencies being used for nefarious purposes… But on the other side, it also (includes) legitimate businesses where they’re trying to get regulations to operate more legitimately.”

Such a ban, if put in place, would put over 60 BATMs out of business, along with their operators. Stewart’s push to crack down on the local cryptocurrency scene is presumably stemming from Vancouver’s rampant money laundering economy, which has been facilitated largely by the zany real estate market and casinos.

A report commissioned by the province’s Ministry of Finance suggests that $7.4 billion has been laundered into Vancouver’s province, British Columbia, in 2018 alone. Any move to curb this rampant issue is likely a win in the local government’s eyes.

Despite this renewed push by governments across the globe to stem the growth of the cryptocurrency ATM space, these machines continue to gain more and more traction each and every day. Per CoinATMRadar, an average of five of these machines is activated each day. And, there are efforts from Canadian cryptocurrency startup CoinSquare and ATM giant Coinstar to bring the joy of purchasing Bitcoin to millions of more individuals in the coming years. Case in point, CoinSquare recently teamed up with JustCash, which has recently developed a software that will allow non-bank-tied ATMs to support cryptocurrency.



Since 2013, Nick has shown interest in Bitcoin and cryptocurrencies. He has since become involved in the industry as a full-time content creator, working for NewsBTC, Bitcoinist, LongHash, among other outlets. Aside from covering the news, Nick is a Creative at Taiwanese technology company HTC. Contact

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