Israeli police arrest five in $5M WhatsApp crypto laundering probe
In brief
- Israeli police arrested five people over about 16 million shekels ($5M) in crypto transactions.
- A WhatsApp group was used to arrange the transactions, police said.
- Fictitious agreements allegedly made crypto proceeds in bank accounts look like loans, police said.
- Authorities seized wallets, computers and tens of thousands of shekels in cash.
- A 2024 audit found about 500 yearly crypto filers out of at least 200,000 potential filers.
What police allege
Investigators from the National Unit for Combating Economic Crime within Lahav 433 suspect the group provided crypto services without a license and failed to report transactions to Israel's tax authorities. That's the headline suspicion.
The more specific allegation is about how the money moved. Police allege the group used fictitious agreements to make crypto proceeds look like loans once those proceeds were transferred into bank accounts, according to The Jerusalem Post as cited by Cointelegraph. (On paper, the bank transfers would read as loans, not crypto proceeds.)
Investigators questioned the five on suspicion of money laundering, fraud and providing financial asset services without a license. During searches of the suspects' homes, authorities seized wallets, computers and tens of thousands of shekels in cash.
The deals themselves, police said, ran through WhatsApp.
Separate Tax Authority arrests
Cointelegraph's report also pointed to two other cases that aren't part of this investigation. Israel's Tax Authority announced two other arrests on Oct. 6 in cases involving suspected failures to report crypto activity.
One involved trades worth tens of millions of dollars. In the other, an Ashdod resident allegedly failed to report income from about $13 million in crypto trades between 2019 and 2021.
The reporting gap
Cointelegraph also cited audit data that puts these cases in context. A November 2024 audit by Israel's State Comptroller found that about 500 people reported crypto activity each year on average from 2018 to 2022, out of at least 200,000 potential filers.
That's roughly one in 400 at most, and it's the gap these unreported-income cases keep pointing back to.
