Once again, people actively trading Bitcoin on the LocalBitcoins platform have found themselves in enforcement’s cross hairs. In the past, this type of activity went by relatively unnoticed in Belgium and the Netherlands. However, police have now arrested two Belgian residents for their involvement in a large-scale unlicensed Bitcoin exchange operation. The team, Zhao Dong 1982 on LocalBitcoins, had been charging exuberant commissions for Bitcoin sales.
Another LocalBitcoins Seller Is Arrested
Although LocalBitcoins is a platform known for connecting buyers and sellers of the world’s most popular cryptocurrency, the platform is also of great interest to many law enforcement agencies. Several people selling on the platform have been arrested in the past, most of them for either being involved in money laundering or for running an unlicensed exchange operation. Selling on LocalBitcoins is considered the same as performing exchange operations, although it is usually allowed under certain amounts.
In the case of LocalBitcoins vendor Zhao Dong 1982, he caught the attention of Belgian police officials due to the high fees he charged when selling Bitcoin. Two brothers have been arrested in Brussels for their involvement in these exchange activities. Dealing with large amounts of Bitcoin is generally frowned upon, especially when sales exceed several hundred of thousands of euros. To this day, it is still unknown where all of these bitcoins came from, although it is possible they were obtained illegally.
A total of 400,000 euros has been seized during the arrest. Nearly 100,000 euros in cash was discovered hidden behind a spare tire in a garage. The remainder of the funds took the form of bank accounts, all of which have been frozen. These two men are not early adopters of the Bitcoin currency by any means; they would not have attracted the attention of law enforcement officials otherwise. However, not too many details regarding this investigation are known so far.
The alias “Zhao Dong 1985” did not just sell Bitcoin in Belgium, but additionally in the Netherlands and Germany. For those unaware, LocalBitcoins is no longer allowed to operate in Germany. The individuals in question had shut down their portal in that region some time ago. All communication between buyers and sellers occurred on the Telegram platform, which provides end-to-end encryption. Though that was considered “suspicious behavior,” people are still free to use whatever platform they like.
It is certainly possible these arrests are a direct result of the recent crackdown on darknet marketplaces. With both AlphaBay and Hansa being taken offline in the past few weeks, more arrests will surely follow moving forward. “Zhao Dong 1982” charged a very high commission for converting Bitcoin to and from cash, similar to how most coin mixers would operate these days. This was a fairly large-scale operation that was illegal in Belgium without an official license. Moreover, there is the possibility that both men were involved in money laundering activities.
As it happens, one of the two arrested brothers is a police official. Those individuals should certainly know better than to get involved in illegal Bitcoin activities. The allure of making a lot of money pretty quickly can sway even the most level-headed people to do things they otherwise would not. For the time being, both men remain in custody, although their fate has not yet been determined. This is an intriguing development that just goes to show selling on LocalBitcoins may be subject to considerable scrutiny by law enforcement officials.