A gang involved in the drug trade has created its own cryptocurrency to launder dirty money

Organised criminals have long exploited the relative anonymity of mainstream cryptocurrencies like Bitcoin and Ethereum to hide the origin of illicit funds.

A British street gang has begun making their own cryptocurrency in an effort to launder money from drug dealing, an expert has claimed.

The plot, which is currently active, bears a passing resemblance to OneCoin - a fake cryptocurrency launched in Germany that turned out to be a giant Ponzi scheme.

However, this is thought to be the first time experts have observed the launch of a genuine digital coin by a British street gang.

Drug crime expert Gary Carroll learned of the scheme through sources but was unable to name the coin or the gang to protect their identity.

The expert witness, who spent 14 years in policing, described it as a "meme coin", which is designed to go viral on social media and rapidly rise in price.

He said the gang hoped to wait for the coin to become more valuable before suddenly selling out as part of a "pump and dump" strategy.

"Criminals have been using crypto to launder money for at least 15 years now," Mr Carroll told MailOnline.

"But developing a meme coin is one step further than simply buying cryptocurrencies like Bitcoin and Ethereum and suggests the process is becoming easier.

"They are using illicit money to pay developers to create a legitimate coin and then launch it onto the market. They are hoping to get the coin onto popular wallets and for the public to fall on it and turn it into the next Dogecoin.

"This is essentially a pyramid scheme and relies on multi-level marketing and loads of people buying in.

"Even if the coin only rises by a small amount they could still make a lot of money before selling out. The those profits will appear to be from crypto entrepreneurship rather than drugs."

Mr Carroll described the gang behind the coin as "mid-level" operators who made money through extortion, fraud, drug supply and the sale of counterfeit goods and cigarettes.

He added the plot, which is currently active, bears a passing resemblance to OneCoin, a fake cryptocurrency founded by Bulgarian-born German entrepreneur Ruja Ignatova.

OneCoin was founded in 2014 and was advertised as "the Bitcoin killer"

"They are based in England but they've got connections to other countries," he said.

"They're not a household name - but they've got enough to throw in a few hundred grand and get the coin off the ground.

"There are lots of meme coins out there that do absolutely nothing but have huge uptakes, so the potential rewards are astronomical."

Mr Carroll has completed more than 1000 expert reports over nine years and given evidence to multiple crown court cases, giving him a deep understanding of the rapidly evolving nature of UK and international drug crime.

He believes the relative ease of creating meme coins suggested it could become a popular method for gangs looking to launder money and turn a quick profit.

"It's just one step further than urban street gangs investing in crypto - why invest in the coin when they can just start one themselves?"

"In one or maybe two years time there will be cases in court, I'm confident about that. But there are no examples of this happening in the UK.

"Criminals, especially drug dealers, aren't known for their patience. So they are wanting to do something that makes money as quickly as possible.

"My own opinion is this will become more common. It's a way to semi-legitimise their trade."

Ekaterina Zhdanova, a Russian businesswoman who used crypto to help gangs launder money

OneCoin remains the largest crypto-related scam to date, with investors losing £100m in the UK alone.

It was launched in 2014 by German-Bulgarian businesswoman Dr Ruja Ignatova, who described OneCoin as "the Bitcoin killer" while addressing an adoring crowd at Wembley Arena.

Between August 2014 and March 2017, more than €4bn (£3.4bn) was invested by devotees in dozens of countries before Dr Ruja suddenly disappeared in October 2017.

It later emerged OneCoin was not a real cryptocurrency but a pyramid scheme hosted on its parent company's servers.

The FBI is now offering a $5m bounty who can help track down Dr Ruja, despite rumours she has been murdered at the orders of a Bulgarian mafia boss.

Mainstream cryptocurrencies like Bitcoin are regularly used by criminals to launder cash or move large sums across borders without having to resort to traditional banking methods.

This is often done through highly organised networks that operate across multiple countries and have a wide variety of different criminal clients.

One system recently exposed by police was run by Russian-speaking hackers and consisted of two networks called Smart and TGR.

Ms Zhdanova graced the covers of multiple business magazines during a career in financial services

Police say Smart and TGR used their global reach to launder money for crime groups including the Kinahans,