Australia’s First Major Crypto Laundering Conviction: Inside Operation Taipan

Victoria Police serves more than 6.7 million people across 237,659 km² — Australia’s second most populous state. As crypto-facilitated crimes started growing in scale and complexity — from investment scams and pig butchering schemes to money laundering — traditional investigation methods weren’t enough to follow complex money laundering patterns on the blockchain. To address this, Victoria Police used blockchain intelligence to trace illicit funds and follow them to their source. “We recognize the importance of embracing new and emerging technologies to combat crime,” said Sergeant David Crowe. Their first major success — Operation Taipan, Australia’s first large-scale crypto laundering takedown — highlighted the critical role of public-private collaboration in safeguarding the commonwealth from digital financial threats.

A red flag from AUSTRAC

In 2020, Victoria Police received a referral from AUSTRAC — the Australian Transaction Reports and Analysis Centre — highlighting an anomaly. "They had flagged an unusually high volume of ATM cash deposits across Melbourne," Crowe explained. "One individual had been identified as the single largest recipient of ATM cash deposits in Australia for the year."

The unusual pattern suggested a sophisticated money laundering operation. As the investigation unfolded under the code name Operation Taipan, it became clear that a Chinese organized crime syndicate was operating an illicit money laundering service for criminal groups across Melbourne. "The syndicate would negotiate with these criminal groups, generally for a fee of around 3%, to launder the cash they received," Crowe said.

Tracing Tether and USDC back to China

The syndicate’s laundering process began with depositing cash into third-party bank accounts, typically procured from Asian university students studying in Melbourne. The funds were then funneled through Australian domestic accounts to illicit remittance service providers who moved the money offshore, primarily to China, and then back into Australia, at the point the cash was ostensibly clean.

Over time, though, their strategy changed. “The syndicate pivoted to using cryptocurrency exchanges instead of illicit remittance service providers,” said Crowe. This shift to crypto added a new layer of complexity. In 2021, as part of the investigation's resolution phase, Victoria Police executed numerous search warrants across Melbourne. They arrested three primary suspects and seized AUD 1.8 million in cash, luxury vehicles, and a multitude of digital devices.

But the real challenge had only begun. “After resolution, the task remained to extract and analyze the data from all seized devices to understand the full scope of the syndicate’s operations,” Crowe recounted.

As evidence mounted, a pivotal moment came when the forensic accountant identified the shift from traditional laundering to blockchain-based methods. “At that point in time, Victoria Police did not have the capability to trace the cryptocurrency assets — specifically USDC and Tether transacted on the Ethereum blockchain,” Crowe admitted.

Recognizing this capability gap, Crowe reached out to Binance in 2022. The exchange provided demographic details for a suspect’s account that had processed over AUD 39 million in crypto transactions within five months. Binance later froze and helped Victoria Police seize roughly AUD 350,000 in digital assets.

Expert analysis from the TRM Labs team

In 2023, Victoria Police formally engaged TRM Labs to conduct expert forensic analysis on the blockchain elements of the case. “This service allowed us to bridge a critical capability gap within Victoria Police — blockchain forensics and Ethereum-based asset tracing,” said Crowe.

Jonno Newman, a senior investigator at TRM Labs, brought years of international experience to the case. “The groundwork that Sergeant Crowe and his team had done was exceptional,” Newman noted. “Without that, the connections would have been far less obvious.”

Using TRM Forensics, Newman was able to map the flow of funds across multiple assets and blockchains. “The layering was intentional and sophisticated. Using TRM, we could clearly demonstrate those connections,” he said.

At the conclusion of his analysis, Newman submitted an expert witness statement. “I produced an expert witness statement in relation to the cryptocurrency component of the money laundering,” he explained. This evidence became a cornerstone of the prosecution’s case.

First conviction involving cryptocurrency

In late 2024, the investigation reached its conclusion in court. “Due to the weight of evidence within the brief, including TRM Labs’ analysis, each of the three accused pleaded guilty to laundering more than AUD 30 million worth of money,” Crowe confirmed. All three were sentenced to lengthy terms of imprisonment.

Beyond the convictions, the case marked a watershed moment for Australian law enforcement. “I was incredibly proud of the achievement of the investigation team and all the members of Victoria Police who worked on the investigation,” Crowe said. “What transpired was Australia’s very first conviction of criminals involved in laundering cryptocurrency.”

This case not only demonstrated the evolving tactics of modern financial crime but also showcased the power of public and private sector collaboration. Operation Taipan stands as a model for future cryptocurrency investigations in Australia.