Belgian Police Raiding Houses in BTC Money Laundering Bust

 

Seemingly unrelated to the recent United States demanding of Greek police to arrest the alleged owner of BTC-e, the Belgian judicial police raided nine locations for the same reason. Not that the U.S. asked them to conduct the raids and subsequent arrests; according to the latest published news, the Belgian judicial police suspected several men of money laundering through LocalBitcoins.

Police, for the usual reasons, left the name and identifying details of the suspects shielded from the public eye. However, we learned, as of July 31, that of the nine raids, police officers ultimately arrested three suspects. Technically, the nine raids only yielded two suspects: two brothers. The searches occurred at addresses in Brussels, Jette, Sint-Jans Molenbeek, Laeken and Evere. The arrest action took place at addresses in Jette and Sint-Jans-Molenbeek.

The arrests connected to Bitcoin money laundering. The money laundering, for some reason, was described as “transactions in which bitcoins were exchanged for cash or vice versa.” The brothers traded Bitcoin with the LocalBitcoins account “Zhao Dong 1982,” police said. Zhao Dong conducted business in Belgium, in the Netherlands, and in Germany. Although he primarily operates from China. The third arrest came from work by the Dutch police.

The Dutch police in Maastricht searched the home of a suspected customer of the two brothers. This search caught the third suspect, according to several news outlets. Additionally, this explains why police had only charged two men. The Belgian judicial police arrested the brothers after an extensive research of their activities on LocalBitcoins.

Every seller on the cryptocurrency exchange sells Bitcoin. However, the brothers traded with an account and made “a number of suspicious transactions.” Their alleged trades with ZhaoDong1982 were called “high value” trades. However, some sites raised suspicion regarding the LocalBitcoins account because Zhao Dong asked for a 5,000 Euro minimum transaction on one internet post. At the time of this article, that price matched 2.1 bitcoins, minus Mr. Dong’s fee. That is a reasonable minimum order. The only possibly suspect element, from the outside, was a post where he revealed alternate ways to contact him—through Wickr and/or Telegram.

Part of the profile reads:

“I am Dong Zhao. The biggest OTC trader In China, I have a good reputation in China bitcoin community. Mail or call me if you want to buy more.”

• Telegram: alan*** (Preferred)
• Phone: +86150******.
• Email: zyjtc****@*****.com
• QQ: 1060*****
• Skype: zyjtc****

OR

• Phone: +8613581****.
• EMail:[email protected]

The phone number is currently associated with “Zhao Dong,” along with another BTC trader under a different username. The Telegram user, Alan***, is yet again under a completely different name. That person, too, posted online—years ago—with the same handle as his Telegram user ID. It should be of little surprise that the name associated with the Telegram user ID is also connected to Bitcoin customs and forums.

The email address can be found on a single German webpage where an expansion from China was made apparent, along with an even stronger push for encrypted messaging:

“Hello,
We are looking for bitcoins for cash. We have a good reputation of localbitcoins. We want to expand in Germany. So if you are looking to sell your bitcoins for cash. Let us know. In four years we have sold more than 400,000 BTC. We are active throughout Germany. The minimum value for sale is 5000 €”

• Telegram: zhao****
• Wickr: zhao****
• Gmail: [email protected]

While the police said the LocalBitcoins user worked with German buyers (or sellers), expanding business to Germany is not illegal or anything of the sort. I spoke with the man himself—one of China’s biggest Bitcoin vendors—where he incidentally conducts much of his business. The arrest occurred mid-late July. If the crimes were as serious as police led the media to believe, the chances of Zhao Dong being a free man are low; massive amounts of money and clearly connected across the globe. If law enforcement arrested the trader, he would not be free. I spoke with the owner of the LocalBitcoins account on August 3.

First, Dutch law enforcement never arrested the man. He claimed to currently be in China, conducting legal business. He Tweeted, logged into LocalBitcoins, and actively used the Telegram account associated with it. For Stonehouse who openly uses a real name and birthday as a user ID, he clearly made no attempts to hide. And second, despite the name of his account appearing in every publication, his “involvement” was entirely innocent. He wrote that he had bought Bitcoin from them—the other traders—with Chinese Yuan Renminbi.

The LocalBitcoins account, in spite of being a massively impressive account, has no relevance to the case.

At the houses that belonged to the set of siblings, police seized a total of 100,000 Euros and various computer equipment. The brothers were 33-years-old and 31-years-old. News outlets reported that the Maastricht suspect was a 22-year-old. Then, a media outlet broke news that Dutch police arrested another suspect, a 24-year-old Dutch man named Tommie V. He, according to a slew of internet commentary, routinely sold Bitcoin to ZhaoDong1982, and ZhaoDong1982, being a high volume Bitcoin trader, bought everything possible.

The case is still under investigation, but for now, that is all.