Law enforcement officials in Spain are arguing that a recent effort
to break up a criminal organization — which utilized bitcoin ATMs — has
exposed a gap in European anti-money laundering statutes
An international case led by Europol and Spain’s Civil Guard earlier
this year uncovered the regulatory loopholes in crypto-related crimes in
new AML regulations issued by the European Commission and that are set to be executed by next year, according to Bloomberg.
The criminal organization reportedly provided large-scale money
laundering services using Bitcoin ATMs, which fall out of the current
financial regulations, not covering either cash machines or
cryptocurrency exchange platforms.
Civil Guard officials reportedly disclosed that the criminals
obtained two ATMs machines from trading platforms and installed them in
Madrid as part of a fake remittance and trading services office. After
sending funds to the ATMs using exchanges, the group would then insert
cash in the machines to receive a QR code to claim cryptocurrency from
those exchanges. They would then give those funds to drug traffickers in
Colombia.
Now, Spanish officials must prove the link between the Bitcoin ATMs
and the confiscated digital funds during the operation — a difficult
feat without the aid of crypto-specific regulation or European law
guidelines regarding this type of crime.
Spain’s gray area
Nonetheless, the regulatory picture in Spain is beginning to take
firmer shape, especially in light of a recent court determination.
This week the Supreme Court of Spain dictated
that bitcoin is not money. The legal precedent was set in a fraud case
where claimants demanded to have their bitcoins reimbursed, having the
initial value of their investment returned in euros instead.
The ruling was based in regulations from 2011, which state that
digital money is “the monetary value stored in electronic or magnetic
means that represent a credit over the issuer”.
According to the entity, bitcoin lacks the legal consideration of
money, being classified as a ” patrimonial immaterial asset” subjected
to supply and market demand.
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