This week’s Secret Crime Fighter discovered a money laundering scheme involving a well-organised crime group coordinating money mules across banks and a cryptocurrency exchange.

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The Typology

Opening multiple accounts

This recent money mule typology shows young UK nationals opening accounts at banks and cryptocurrency exchanges in order to launder the proceeds of scams. Over the period of a few months, the crypto exchange onboarded hundreds of individuals between the ages of 18-30 who immediately chose to complete identity verification measures not normally required until using the account.

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Centralised control

As soon as the accounts were successfully verified using the money mules’ details, the organised criminals took control. The crypto-exchange observed a change in log-in patterns, with shared IP addresses and devices.

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The accounts received a few small test deposits from business bank accounts with corresponding names, indicating that the same money mules had set up accounts at both the bank and crypto exchange. After the test deposits were successful, the deposits quickly cascaded in value up to a few thousand per deposit. Each payment was quickly exchanged to Bitcoin and spent via crypto merchants or payment services.

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Stopping the Typology

The majority of the deposits came from a single bank which allowed our Secret Crime Fighter to quickly implement enhanced monitoring on deposits associated with that sort code, while they worked to create more sophisticated controls. They also worked with this bank to better understand the activity and share proposed measures.

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Our Secret Crime Fighter was able to introduce a number of effective new transaction monitoring controls, focusing on high velocity payments and specific patterns of deposits and withdrawals, particularly fiat deposits followed by immediate crypto withdrawals and vice versa. They also expanded their use of digital attributes, further integrating signals such as shared device fingerprint and IP address into targeted rules.

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Thanks for reading our latest Secret Crime Fighters newsletter. If you have an interesting typology that you’d like to share, we’d love to hear about it! Please email us at [email protected].