Biggest 'Bitcoin' fraud in Europe busted: Pirate TV channels sold and the virtual coins laundered

National Police and the tax authorities have seized 48,800 decoders, €183,200 in cash, 10 top-of-the-range cars and 78.3 'Bitcoins', worth €31,320.

The racket was uncovered after a genuine decoder firm reported a different company was copying theirs and selling them.

These counterfeit cardsharing systems were shipped from China and the gang decrypted television signals so it could sell pay-per-view channels online.

IPTV, or Internet Protocol Television, was also used to provide in excess of 1,600 pirate channels from around the world via servers throughout Europe.

Raids on homes in the provinces of Málaga, Valencia, Madrid, Córdoba, Lugo in Galicia, and on the island of Mallorca led to 140 extra-strength computer processing units being seized.

These were run by siphoning off the public electricity system, since they require a high level of power to operate.

The pirate channels were sold through the 'Bitcoin' community, meaning the perpetrators earned large amounts of this virtual currency through illegal sales.

They were said to be earning up to a 'Bitcoin' a day – each of these coins is worth about €400.

The 'Bitcoin' mining centres were used as a method of laundering the sales from the pirate channels, since these were then cashed in for euros and spent on property, expensive cars, and even a private jet.

Methods of pirating the channels included cardsharing, whereby the user accesses pay-per-view TV through a satellite dish or aerial pointing towards other receivers – in the form of a 'host house' – using a doctored decoder and an internet connection.

According to investigators, the gang had set up front companies to launder the 'Bitcoins' and deliberately failed to declare the decoders when carrying them back to Europe from China.

Even hotels and restaurants unwittingly invested in the pirate channel package.

Although the online currency is legal per se, its use in this instance is not.