Sam Karagiozis, a Bitcoin investor and the founder of Auscoin cryptocurrency, was arrested by Australian Federal Police or AFP for alleged drug trafficking.
Following the arrest, Australia’s anti-money laundering watchdog AUSTRAC also suspended the registrations of two digital currency exchange businesses, Auscoin and SK BTC, where he was a key member, removing their ability to continue to conduct business.
In a joint statement, AFP and AUSTRAC, announced the arrest of the 27-year-old Bulleen man during the second phase of an AFP investigation into an organised crime syndicate.
Karagiozis, who introduced cryptocurrency ATMs across Australia, is charged with 14 offences for trading 30 kilograms of drugs, including cocaine, MDMA, methamphetamine, and ketamine.
AFP officers executed search warrants in the Melbourne suburbs of Bulleen, Templestowe Lower and Malvern. They seized steroids, Australian currency and cryptocurrency related items.
AFP said, “Police will allege in court that the 27-year-old played a key role in directing the operations of the criminal syndicate, which used various dark net sites, bitcoin accounts and legitimate business for the sourcing, payment and distribution of the illicit drugs.”
In a separate action, the AFP-led Criminal Assets Confiscation Taskforce or CACT successfully sought the restraint of assets related to the investigation. Orders were obtained from the court to restrain property valued in excess of $2 million.
The latest raid follows the initial phase of the investigation that led to the arrest of two men for drug trafficking offences in October 2017. The AFP said it continued its investigation into those responsible for allegedly importing border controlled drugs through international mail into Melbourne.
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