French police arrested 29 alleged members of the terrorist network who sent funds to Syria via Bitcoin coupons.
French police arrested 29 individuals related to a Syrian terrorist group that allegedly used convenience shops that accepted Bitcoin to send hundreds of thousands of euros in cryptomorps abroad, local news agency Capital reported on Tuesday (29).
French customers can buy cryptomime coupons worth up to $250 (about $292) – mainly supplied by two local companies, Digycode and Keplerk – in more than 30,000 convenience shops and tobacconists across the country. These prepaid coupons can be exchanged for Bitcoin and other cryptomoedas via the supplier platforms mentioned.
According to the National Anti-Terrorism Prosecutor’s Office, the suspects were buying these crypto coupons and sending their codes to the group’s leaders – two French citizens currently residing in Syria. The coupons were then converted into Bitcoin Compass in Turkey.
Although customers are required to provide identifying information in order to register an account on the coupon issuer’s website and receive their Bitcoin, the terrorist group leaders were still able to successfully activate their BTC codes. They were able to do the conversion despite being sentenced to 10 years in prison and having international arrest warrants issued against them, noted the media outlet.
Digycode co-founder Christopher Villegas told Capital that the company was informed of the situation in July and has practically blocked access to its platform from outside France since then.
„We have banned all connections outside France and Switzerland, all other countries like Turkey and Syria have been completely banned,“ he said.
Keplerk CEO Adil Zakhar added that „this case shows that France has been able to position itself with regard to cryptomoeda, including in the fight against abuses linked to the use of Bitcoin. Still, recent arrests have rekindled debates about the potential misuse of cryptomoreds for criminal activities.
„This case brings to the fore the financing of terrorism in Syria through cryptomorphos and, in the background, the obligations to combat this type of operation that must be implemented by the sector’s service providers,“ noted William O’Rorke, a partner in the ORWL law firm specializing in disruptive technologies and blockchain-related cases.
To avoid such activities, all companies selling cryptomoeda must obtain approval from the Autorité des marchés financiers (AMF), France’s stock market regulator, by the end of the year. Currently, only the Coinhouse cryptomoedas exchange has the registration.
„The systems for combating money laundering and terrorist financing do not allow everything to be detected, especially for small transactions,“ O’Rorke said, adding: „Thus, it is impossible to assess whether the surveillance system is faulty, even if it is expected that AMF and ACPR will be vigilant when the PSAN is registered. ”
He noted that cryptomime coupons are the simplest way to buy Bitcoin in France and therefore the easiest to detect. At the same time, it would be much less risky for malicious agents to use one of the foreign cryptomime platforms – and more difficult for the authorities to discover.