FinTech owner uses Binance to launder money
London-based fintech owner, Caio Marchesani, is currently facing serious allegations of assisting notorious drug traffickers to money launder hundreds of millions of euros through the cryptocurrency exchange Binance.
This marks one of the largest-scale incidents of its kind in the eyes of European prosecutors, Bloomberg reports.
Belgian authorities are actively seeking the extradition of the 38-year-old Italian from the UK as part of their comprehensive efforts to dismantle a transnational criminal organization. They assert that Marchesani, the owner of Trans-Fast Remittance, a payments business regulated by the Financial Conduct Authority (FCA), “knowingly and intentionally” played a key role in amassing substantial cash sums and converting them into Bitcoin for Sergio Roberto De Carvalho.
He is a Brazilian described by Interpol as one of the world’s most wanted drug kingpins before his apprehension in 2022. He also converted drug money to Bitcoin Flor Bressers, a Belgian national known as the “finger cutter,” who was also arrested last year.
Marchesani’s arrest took place in May at Heathrow Airport, shedding light on a situation that is now putting the British financial technology sector under intense scrutiny. Concerns have arisen about the adequacy of controls within the industry, raising fears that weak oversight may be facilitating the movement of illicit funds worldwide.
Transparency International UK has called for stricter supervision, especially in light of their findings that more than one-third of UK-licensed electronic money institutions exhibit red flags. In response to inquiries, the FCA stated that it is “engaging” with Trans-Fast as part of its ongoing supervisory efforts, particularly regarding these matters.
The roots of the Belgian investigation trace back three years ago when Dutch customs officials seized an astonishing 12 tonnes of cocaine, with an estimated worth exceeding €260 million ($283 million), from containers at Rotterdam, Europe’s busiest port. Subsequent investigations led authorities to Flor Bressers and Sergio Roberto De Carvalho, ultimately zeroing in on Caio Marchesani after a breakthrough in decoding encrypted communications.
A total of 33 suspects from various countries, including Brazil, Hungary, the Czech Republic, and France, have been identified in connection with this criminal network. As of now, five of them are in pretrial detention, with Bressers and De Carvalho detained in Belgium and Marchesani held in the UK.
The case against Marchesani came to public attention during a series of extradition hearings in London. The court denied a request for bail, considering him a flight risk. The judge is expected to make a ruling on his extradition later this month.
Marchesani Held 14 Binance Accounts For The Drug Lord
According to Belgian prosecutors, Marchesani managed 14 Binance accounts for Bressers and held cash for De Carvalho while charging exorbitant fees, sometimes as high as 9%, for transferring funds. Additionally, it was noted that a substantial portion of Trans-Fast’s clientele, approximately 85%, consisted of Brazilians.
This underground network allegedly fused new technology with the traditional hawala system, a centuries-old method of transferring money prevalent in regions such as the Middle East, where international and local remittances rely heavily on trust. The use of cryptocurrencies surged after the Covid-19 pandemic disrupted traditional cash deliveries, according to Belgian prosecutors. Binance provided law enforcement with “practical operational assistance” during the investigation, according to a spokesperson from the cryptocurrency trading platform.
Amanda Bostock, a lawyer representing Belgian authorities, characterized Marchesani as “a dark banker who receives money and moves it around at the will of the criminal organization to disguise its origins.”
During the investigation, investigators discovered “very large cash sums” at an apartment near the US embassy in south London, guarded around the clock. Prosecutors stated that approximately £1.5 million ($1.9 million) worth of cryptocurrencies were also found, with the electronic wallet subsequently being frozen.
Marchesani’s Lawyers Claims Funds Had Legitimate Origins
Marchesani’s legal team firmly denies the allegations, asserting that his funds had legitimate origins through a UK-based company focusing on healthy eating in a cafe setting, referencing Acai Berry Foods Ltd., where Marchesani serves as the chief financial officer and a 50% shareholder.
Marchesani, who previously interned at Deutsche Bank, had ambitions to transform Trans-Fast into an online bank, according to a ruling from the employment tribunal. Recent Companies House filings from August indicate the addition of another owner to the registry.
In encrypted conversations deciphered by authorities, Marchesani, using the pseudonym ‘Greysmith,’ was allegedly inquiring about the legality of specific financial activities. In one message, he asked, “friend, this ted 60 is for crime or normal?” to which ‘Lucrativeherb,’ a pseudonym attributed to De Carvalho by prosecutors, replied, “Normal. Everything is criminal.” Another message attributed to Marchesani reportedly said, “only risk is when the police are around.”
Both Drug Lords Hold Several Criminal Charges Against Them
Flor Bressers, who holds a master’s degree in criminology, faced multiple charges, including kidnapping, gang drug trafficking, and theft, and was apprehended in Zurich in February 2022. Sergio Roberto De Carvalho, on the other hand, was arrested in Hungary in June 2022 and subsequently transferred to Belgium by the air force. Interpol had issued a Red Notice for his arrest, with several countries, including Brazil, seeking his extradition on several charges, stated Bloomberg.
The Belgian prosecutor conveyed in a July letter to the UK that almost all evidence has been collected, and she intends to conclude the investigation in early September. She also stated that she has already decided the case will proceed to a full criminal trial. However, a spokesperson for the prosecutor declined to comment further.
Marchesani’s legal team in London has indicated their intention to challenge the extradition further, citing discrepancies in the investigators’ presentations at different points in time. If convicted in Belgium, Marchesani could face a maximum sentence of five years in prison in a country he claims to have never visited.
