Court documents also reveal that France has begun proceedings against a top-level international distributor of another cryptophone network, supplied by Canadian company Sky ECC, used by organised crime groups.
A Canadian national, who was arrested in Spain, is alleged to have distributed Sky ECC encrypted phones worldwide through a network of dealers.
According to French court documents, the man is accused of collecting cash from customers who bought Sky ECC phones and converting it into cryptocurrencies to launder financial transactions.
On one occasion, he met with an accomplice in a hotel in Paris to convert €160,000 into bitcoin.
According to French court documents, Dutch investigators found that the Sky ECC encrypted handsets could only be bought through a network of resellers.
Payments were made in cash and users were given details of the reseller and after-sales service, but remained anonymous, with no ID or proof of residence required to buy the phone.
Intercepted messages showed that money was collected using a photograph of a serial number on a bank note that was used to validate the payments when collected.
Investigators identified six resellers in France offering the encrypted phones.
One reseller claimed he knew none of his customers personally and had been instructed not to ask purchasers why they were buying encrypted phones.
The reseller also told investigators that he had been asked to send out a message to his contacts, recommending that they do not show their hands in photographs taken on the encrypted phones.
The French Court de Cassation found in April that acts committed overseas in connection with Sky ECC should be regarded as criminal acts committed in France.
It found that the company’s main server and a back-up server were hosted by a French OVH datacentre, that there were 2,500 users of Sky ECC and a number of resellers, some of whom had been charged, which brought activities outside France into French jurisdiction.
The Canadian reseller and an alleged accomplice are facing charges of providing cryptography servers unlawfully in France, money laundering, narcotics and organised crime offences.
Dutch and Belgian police began investigating Sky ECC in 2016. More than 1,600 Belgian police officers carried out raids on 200 homes, while Dutch police raided 75 homes, recovering millions of euros in cash, jewellery, luxury vehicles and firearms in March 2021.
Police stored and examined “hundreds of millions” of messages from Sky ECC during a two-month hacking operation by police cyber specialists.
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