Two brothers arrested in bitcoin laundering scheme

The federal police had been conducting undercover investigation into what is known as the dark web – a part of the internet not accessible by a normal browser and search engine, and dominated by illicit activities including drugs, arms and stolen credit card information. The target of their operation was money-laundering on the website localbitcoins.com.

Investigators noticed that one account, Zhao Dong 1982, was unusually active in Belgium, the Netherlands and Germany. Once undercover officers made contact with the account owner, communication shifted to the messaging service Telegram, where encrypted messages reputedly cannot be intercepted.

Zhao Dong appeared to be operating out of China and was represented in Belgium by the two brothers, aged 33 and 31. Their job was to carry out transactions with bitcoin buyers or sellers, through clandestine meetings in car parks, hotel lobbies and fast food restaurants, where they traded bitcoins for cash.

The police began suspecting money laundering because Zhao Dong was charging an unusually high commission and all of the transactions were made in cash. At one address in the Brussels municipality of Evere, investigators found more than €90,000 in cash – the money was hidden in a spare wheel in the garage. They also seized €300,000 from bank accounts linked to the two brothers.

Last week, the brothers were remanded in custody for one month by a court in Hasselt. On Wednesday, officers in the Netherlands searched the home of a 22-year-old Maastricht resident suspected of being the brothers’ client. Another Dutch national was arrested on Saturday.