Money laundering 2.0: From cash-filled bags to smartphones – the legal hunt for crypto funds

Money laundering Is not what it used to be. The sports bag full of cash has given way to digital wallets. Anonymous exchange services and mixers make crypto assets appear hard to trace, but the Dutch Fiscal Information and Investigation Service (FIOD) actively investigates these digital money flows. We frequently encounter such cases in our tax and criminal law practice.

For those suspected of crypto-related money laundering, the playing field has changed radically. Not only have the authorities’ technological capabilities improved significantly, the legal landscape has also shifted. In this blog, I discuss this new reality—as outlined in the FIOD’s 2024 Annual Report—and what it means for the defence.

From Blockchain to Evidence

In its 2024 Annual Report, the FIOD gives explicit attention to digital financial crime, alongside VAT fraud, which our colleague Thijs Droog addressed in a previous blog (in Dutch). The FIOD refers to cryptocurrencies as a “structural component of the criminal financial ecosystem.” Mixers, privacy coins (hard-to-trace assets such as Monero), and decentralised exchange platforms play a central role in this.

The FIOD positions itself as a technical specialist. Staff are trained in blockchain analysis, AI tools are deployed to analyse seized data, and the FIOD cooperates with international law enforcement agencies and, within the Netherlands, with units such as the Police’s High Tech Crime Team (THTC). In 2024, for example, two major cryptocurrency exchanges, Cryptex and pm2btc (in Dutch), were taken offline. To seize assets, the FIOD worked with Chainalysis and Tether.io. The message is clear: cryptocurrencies are no longer untraceable. Asset seizures can render digital assets inaccessible for years, and often they are sold off immediately—or even confiscated permanently. It is wise to be prepared and take preventive measures before it is too late.

The International dimension

Crypto knows no borders—and neither does law enforcement. In 2024, the FIOD handled 272 international mutual legal assistance requests involving crypto as a key element. We regularly see clients confronted with the freezing of wallets or digital assets abroad, even without any prior suspicion or charges in the Netherlands.

This raises important questions about international evidence: how was it obtained? Was the right to a fair trial respected—particularly in jurisdictions such as China or Russia? Every suspect has the right to have their case heard by an independent and impartial tribunal within a reasonable time, and to be given the opportunity to mount a proper defence.

From suspects to ‘facilitator’

The FIOD no longer focuses solely on the traditional suspect. Increasingly, so-called “facilitators” are targeted as well. Examples include:

• entrepreneurs who accept crypto payments without sufficient Know Your Customer (KYC) procedures;
• young individuals who ‘lend out’ their wallets;
• developers who write smart contracts enabling anonymous deposits and withdrawals.

This broad approach means that even well-intentioned but careless individuals or businesses may come into the crosshairs of criminal investigations. Especially in a digital context—where transactions are anonymous and cross-border—the risk of legal entanglement looms large.in het strafrechtelijk vizier terecht kunnen komen. Zeker in een digitale context, waar transacties anoniem en grensoverschrijdend verlopen, ligt het risico op juridische betrokkenheid op de loer.

Three key challenges for the defense

1. Digital evidence is complex – and fallible

Blockchain analysis may appear objective, but this is far from always the case. Many analyses rely on proprietary software such as that of Chainalysis. The underlying algorithms are non-transparent, and the “wallet labels” (e.g. darknet-associated) relied upon by prosecutors are not independently verifiable. This raises serious concerns regarding the fairness of the trial.

Defence counsel would be wise to critically assess the raw data, methodology, and context of any such analysis. In the case ECLI:NL:RBROT:2023:10720, the Rotterdam District Court held that a Chainalysis report did not constitute sufficient evidence without further corroboration.

Attributing a blockchain transaction to a specific individual is equally complex. A wallet address is merely a key—without additional evidence, such as IP addresses or access to the seed phrase, one cannot definitively link a person to a wallet.

2. Active involvement of facilitators

Criminal investigations now increasingly focus on facilitators. When does facilitating mixers, privacy coins, or operating a crypto platform without adequate KYC procedures become criminally liable?

Recently, the founder of Tornado Cash was sentenced to over five years’ imprisonment. The mixer was developed without functionality allowing identification, control, or tracing. According to the court, it was Tornado Cash that severed the link between deposit and withdrawal, thus concealing the origin of funds—amounting to money laundering. The argument that users chose to launder funds themselves and that the developer bore no responsibility was rejected.

This illustrates a legal tension: are those offering platforms and interfaces simply part of a (crypto) infrastructure—and thus neutral—or does their involvement constitute criminal liability when used by criminals? Liability requires intent, or at least the conscious acceptance of the risk that one’s code or infrastructure is used for money laundering.

3. De facto reversal of the burden of proof

A critical issue is how the Public Prosecution Service shifts the burden of proving lawful origin to the suspect in money laundering cases. Pursuant to established Supreme Court case law (HR 13 juli 2010, ECLI:NL:HR:2010:BM0787, het witwas stappenplan) a suspect may be required to provide a concrete and verifiable explanation for the lawful origin of assets, if there is a justified presumption of laundering. Failure to do so may be taken into account as incriminating.

This is particularly problematic in crypto cases. Many early adopters lack proper records, and some wallets are untraceable—whether intentionally or not. Nevertheless, the lack of an explanation is increasingly used by prosecutors as indicative of laundering. This effectively results in a reversal of the burden of proof, which runs counter to the fundamental principle of criminal law: every suspect is presumed innocent until proven guilty.

Final thought: Digital prosecution requires digital defence

The FIOD appears ready for the digital future—and rightly so. But the defence must also rise to this challenge.

Criminal proceedings are becoming increasingly digital, which makes them more complex—and more vulnerable. Effective defence now requires technical expertise, critical scrutiny of so-called “objective” analyses, and vigilance in upholding legal safeguards. Our firm possesses this expertise. While law enforcement increasingly relies on technology, protecting legal rights remains a human endeavour.

Have questions about a criminal allegation? Contact one of our specialists at Jaeger Advocaten for a confidential consultation.

This article is translated from Dutch to English with ChatGTP and may not be 100% accurate. Although we try to reproduce the original Dutch text as accurately as possible, no rights can be derived from the content of machine-translated texts.