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Spain: Drug Trafficking Ring Using Cryptocurrency to Launder Money Arrested

(May 1, 2018) On April 9, 2018, the Guardia Civil (Spanish Police), in an operation called “Tulipán Blanca” (White Tulip), arrested eleven members of a drug trafficking ring that was laundering money using bitcoins. The police operation was coordinated with Europol, Finnish law enforcement authorities, and the US Department of Homeland Security. (Detenido un Tarraconense por Blanquear Dinero de la Droga con Bitcoins, DIARI DE TARRAGONA (Apr. 9, 2018).)

Following the arrests, the Spanish Police carried out eight searches and seized several electronic devices, documents, and the equipment used to perpetrate the crimes, such as money-wrapping bags and money-counting machines. (Id.)

The criminal organization, which operated in Spain and Colombia, laundered more than €8 million (about US$9.7 million) through traditional methods and bitcoin transactions. (Id.)

The crime of money laundering is punishable in Spain by imprisonment of six months to three years under the Penal Code. (CÓDIGO PENAL, BOLETIN OFICIAL DEL ESTADO [BOE] (official gazette), Nov. 24, 1995, updated Apr. 24, 2015, BOE website.)

Drug traffickers contacted experienced money launderers to carry out the operations needed to launder the illegally obtained money. The ring deposited small cash amounts into 174 bank accounts using ATMs in Spain. (Detenido un Tarraconense por Blanquear Dinero de la Droga con Bitcoins, supra.) These funds were later withdrawn through credit cards linked to bank accounts in different Colombian cities and Panama. (Id.)

Feeling the pressure of the banking institutions and to prevent the banks from tracking the illicit transactions, the ring contacted a Finnish cryptocurrency exchange platform in order to convert the ring’s cash into bitcoins, which would later be exchanged for Colombian pesos. (Id.)

With the assistance of the Finnish government, the Spanish Police succeeded in reconstructing all the transactions and determining the origin and destination of the funds. (Id.)