British drug dealers create their own cryptocurrency to launder dirty money: How street criminal gangs develop new coins in the first case in the UK
MailOnline can reveal that a gang involved in the drug deal created its own cryptocurrency to launder dirty money, which may be the first known case of similar cases in the UK.
Organized criminals have long used the relative anonymity of mainstream cryptocurrencies like Bitcoin and Ethereum to mask the origins of illegal funds.
But the move by the British street gangs has taken their own digital coins to “left” things “further” according to Gary Carroll, a drug crime expert at Claymore Advisory Group.
The currently active plot has similarities with Onecoin, a fake cryptocurrency initiated in Germany that turned out to be a huge Ponzi scheme.
However, this is considered the first time experts have observed that British street gangs have launched real digital coins.
Mr. Carroll spent 14 years working on policing before becoming an expert witness, and he learned about the program through sources, but could not name coins or gangs to protect his identity.
Drug and data interpretation experts describe it as a “meme coin”, which refers to cryptocurrencies designed to spread and rise rapidly on social media.
He said the gang hopes to wait for the coins to become more valuable and then suddenly sell them as part of the “pump and dump” strategy.
“Criminals have used cryptocurrencies to launder money for at least 15 years,” he told MailOnline.
‘But developing meme coins is a little further away than just buying cryptocurrencies like Bitcoin and Ethereum, but rather suggesting that the process becomes easier.
“They are using illegal funds to pay legal coins to developers and then bring them to market. They want to put the coin on a popular wallet and hope that the public can land on it and turn it into the next dog.
“This is essentially a pyramid plan that relies on multi-level marketing and people who buy in large quantities.
“Even if the coins are only added a small amount, they can still make a lot of money before they are sold out.
“These profits appear to be from crypto entrepreneurship, not drugs.”
Mr. Carroll described the gang behind the coins as “middle-level” operators who make money through extortion, fraud, drug supply, and the sale of counterfeit goods and cigarettes.
The plot is currently active and has similarities to Onecoin, a fake cryptocurrency established by Bulgarian-born German entrepreneur Ruja Ignatova,
Onecoin was founded in 2014 and was advertised as a “bitcoin killer”
“They live in the UK but have connections with other countries,” he said.
“They’re not a household name – but they have enough hits to throw hundreds of big grands and throw coins off the ground.
“There are a lot of meme coins out there that do nothing except with a huge absorption, so the potential reward is astronomy.”
Mr. Carroll completed more than 1,000 expert reports in nine years and provided evidence to several Crown Court cases, giving him a profound understanding of the rapid development of drug crimes in Britain and internationally.
He believes that the relative simplification of making meme coins suggests that it could be a popular method for gangs looking to launder money and make quick profits.
“This is only one step ahead of city street gang investing in cryptocurrencies – why invest when coins can start on their own?
‘In one or two years, there will be cases in court and I am confident about it. But there are no examples of this happening in the UK.
Criminals, especially drug dealers, are not known for their patience. So, they want to do something that can make money as soon as possible.
My own view is that this will become more common. This is a semi-legal approach. ”
Ekaterina Zhdanova is a Russian businesswoman who uses cryptocurrency to help gangs launder money
Onecoin remains the biggest cryptocurrency-related scam to date, with the UK alone losing £100 million.
It was launched in 2014 by German-Balgary businesswoman Dr. Ruja Ignatova, who described Onecoin as a “bitcoin killer” while speaking at Wembley Arena.
Between August 2014 and March 2017, before Dr Ruja suddenly disappeared in October 2017, devotees invested more than 4 billion euros (£3.4 billion) in dozens of countries.
Later, it came up with Onecoin, which wasn’t really a cryptocurrency at all, but a pyramid scheme hosted on its parent company servers.
The FBI now offers a $5 million bounty, and despite rumors she was murdered in the orders of the Bulgarian Mafia boss, she can help track Dr. Ruha.
Criminals often use mainstream cryptocurrencies like Bitcoin to launder money or span large amounts of money across borders without having to resort to traditional banking methods.
This is usually done through highly organized networks that operate in multiple countries and have a wide variety of criminal clients.
A system recently exposed by the police is operated by Russian-speaking hackers and consists of two networks called Smart and Tgr.
Ms. Zhdanova adds a rich cover to the covers of multiple business magazines during her career in financial services
Police said Smart and TGR used their global laundering of money for criminal groups including Kinahans and street drug gangs operating in several different countries.
According to the National Crime Agency, they have also helped Russian clients bypass financial restrictions to invest money overseas in the UK and the Kremlin.
Smart is run by Ekaterina Zhdanova, a charming businessman who often adds luster to the cover of business magazines during her early career in financial services.
She is currently in custody in France, while TGR’s boss, Russian businessman Georgy Rossi, is missing.
