Police in France Bust Illegal Bitcoin Exchange

By Eric Calouro July 7, 2014 11:09

Police in France have reportedly closed the curtains on a bitcoin exchange they say was being run in violation of the law, Reuters reports. (In response to comments below, the name of the exchange is not immediately clear.)

In total, authorities have seized about 388 bitcoins from the operation, worth $240,000 at the time of this writing, in a move that comes as global scrutiny on bitcoin and digital currencies is at an all-time high.

According to Reuters, two individuals from the cities of Nice and Cannes in the French Riviera were put under a formal investigation as of Friday, and have been detained on suspicion of operating a website that both illegally sold and lent bitcoins to users.

Police are said to have seized one of the website operator’s bitcoin portfolio, in addition to computers and credit cards.

“It’s the first time in Europe that a judicial action has resulted in the closure of an illegal exchange for virtual currency,” said Olivier Caracotch to Reuters, who serves as prosecutor for the town of Foix — the place where this investigation began. “It’s also the first time in France that Bitcoins have been seized as part of a judicial procedure.”

Together, both individuals detained are possibly looking at charges of illegal banking, money laundering, and even operating an unlawful gambling website.

Authorities were first alerted to the operation from a retired policeman who bought bitcoins on the website.