| A blockchain analytics firm had traced the client's money to a wallet address at Huobi Global, now HTX, a major cryptocurrency exchange that said it complied with anti-money laundering rules. An HTX representative later revealed wallet's owner was not a person, but a company: Kyrrex Ltd.
Registered in St. Vincent and the Grenadines, a Caribbean country where the crypto industry is loosely regulated, Kyrexx onboarded customers without proper checks who were later accused of fraud and other crimes, ICIJ found. The exchange also provided trading services through accounts hosted — or, in industry terms, "nested" — on the larger exchange.
Nested services are not illegal. But they make tracing illicit cryptocurrency more difficult and provide cover to both the host and the nested exchanges, experts say.
"The promise of blockchain tracing was that we could have transparency," Hupkes told the International Consortium of Investigative Journalists. "But this is just a story. In fact there's more behind it."
Now, Hupkes is representing more than 20 Dutch scam victims hoping to recover at least $11 million in a lawsuit against Kyrrex.
The findings are part of The Coin Laundry, a cross-border investigation by ICIJ and 37 media partners that reveals how cryptocurrency exchanges profit off the proceeds of scams, theft and other crimes — while those who've lost their savings or livelihoods are left with little hope of justice. Read more.
MORE FROM THE COIN LAUNDRY
In Canada, ICIJ media partners went undercover to show how a booming industry of services to convert cryptocurrency to cash is undercutting anti-money laundering protections. ICIJ's Belgian partner reported on how Binance — the world's largest cryptocurrency trading platform — has stopped cooperating with European law enforcement. Meanwhile, partners in Ecuador, Colombia and Uruguay examined two alleged multimillion-dollar crypto scams.
HOW ICIJ INVESTIGATED CRYPTO
For The Coin Laundry investigation, ICIJ's data team analyzed tens of thousands of cryptocurrency transactions to expose a shadow economy awash with billions of dollars in dirty money. Here's how we did it.
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Carmen Molina Acosta
ICIJ's digital producer | 
