Police suspect the group drew up fictitious loan agreements to disguise crypto trading proceeds it transferred directly into bank accounts.
Israeli police arrested five people on Tuesday in a money laundering investigation involving about 16 million shekels ($5 million) in crypto transactions arranged through a WhatsApp group.
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. Police allege the group used fictitious agreements to make crypto proceeds transferred into bank accounts look like loans, according to The Jerusalem Post.
Authorities seized wallets, computers and tens of thousands of shekels in cash while searching the suspects’ homes. Investigators questioned the five on suspicion of money laundering, fraud and providing financial asset services without a license.
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.
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.
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