US authorities have accused Russian citizens of working for a large-scale network to launder money through cryptocurrencies. What are we talking about?
The U.S. government has charged two Russians and two crypto exchanges associated with them with alleged illegal financial transactions. According to the Treasury Department, the Department of Justice and the Department of Foreign Affairs, the suspects are involved in criminal money laundering schemes. The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has named Russian platform PM2BTC and someone associated with it, Sergei Ivanov, as targets of “primary money laundering concern.” At the same time, the Treasury Department’s Office of Foreign Assets Control (OFAC) imposed sanctions on Ivanov, another crypto exchange Cryptex, and another suspect, Timur Shakhmametov.
Even the most famous representatives of this niche and the richest people in the world in general have to answer for crimes with cryptocurrencies. For example, today the former head of the Binance exchange Changpeng Zhao was released from prison in California.
He spent four months there as a result of the investigation of the U.S. Department of Justice. At the same time, the entrepreneur personally admitted his guilt and appeared in a US court on his own, which influenced the short duration of his imprisonment.
Changpeng Zhao, former head of cryptocurrency exchange Binance
It is important to note that the end of Zhao’s imprisonment fell on the 29th of September, which is a Sunday. However, when it falls on a weekend, prisoners are traditionally released on the last weekday before that.
What’s being done with cryptocurrency
According to Cointelegraph’s sources, PM2BTC handles proceeds from ransomware attacks and other illegal activities. At least half of its transactions are reportedly related to illegal activity. PM2BTC uses the same wallet infrastructure as UAPS or Universal Anonymous Payment System, an underground payment processing system.
The investigation revealed that PM2BTC was actively used by the darknet marketplaces Hydra and Ferum Shop. As noted by representatives of the law, these platforms spent a combined $3.86 million through the exchanger. The total volume of illegal transactions of other platforms reaches $600,000, while the exchange Garantex made transfers of $300,000, Cointelegraph reports.
The domain of cryptocurrency platform PM2BTC has been confiscated
Cryptex is registered in St Vincent and the Grenadines, but advertised in the Russian Federation. Here’s how US Treasury Department officials commented.
Cryptex is linked to transactions worth over $720 million. These funds appear in transactions with services that are frequently used by Russian cybercriminals, including fraudulent shops, cryptomixers, exchanges without mandatory KYC identity verification, and the OFAC-sanctioned Garantex platform.
The Treasury Department thanked the US Secret Service, Dutch police and the Dutch Financial Intelligence and Investigation Service for seizing domains and infrastructure associated with PM2BTC, Cryptex and Ivanov. The analytics platform Chainalysis, along with a USDT stablecoin issuer called Tether, also participated in the operation.
Information about the reward for information about Sergey Ivanov
Ivanov was charged with one count of conspiracy to commit and facilitate bank fraud related to websites that trade in stolen credit card information. In other words, the Russian is considered guilty of carding.
Carding is a type of cybercrime in which fraudsters use stolen credit or debit card data to make purchases or financial transactions. This data is usually obtained through hacks, phishing attacks or purchased on the darknet. Carders may use them to purchase goods or cash out, often hiding their identity through anonymous online services.
Cryptocurrency fraudster
Timur Shakhmametov was charged with conspiracy to commit and facilitate bank fraud, conspiracy to commit wire fraud, and money laundering. The U.S. State Department has offered a reward of up to $10 million for information leading to the arrest of Ivanov or Shakhmametov.
Information about the reward for information about Timur Shakhmametov
The news was commented on by US Deputy Attorney General Lisa Monaco. Here is a quote on the matter, which is cited by Coindesk.
Today, two accused Russian nationals allegedly made millions of dollars in large-scale money laundering and maintained a network of cybercriminals around the world. Sergei Ivanov, according to investigators, facilitated the activities of darknet drug traffickers and ransomware operators.
The US government is unlikely to be able to reach and arrest the suspects anytime soon – especially if they are in the Russian Federation. Unfortunately, crypto exchanges and exchanges are still being used by criminals for criminal purposes. This attracts the attention of law enforcement agencies and negatively affects the image of cryptocurrencies.
However, the overall situation is changing for the better, as in recent years many trading platforms have introduced mandatory confirmation of customers’ identities during the so-called KYC procedure. It involves the disclosure of basic information such as full name, place of residence and phone number. At the same time, for advanced confirmation, which allows you to increase the limits for withdrawals and other transactions, it is necessary to provide bank documents.
This situation once again shows the scale of the cryptocurrency industry. Still, its use has allowed serious crimes to be committed, in addition to the authorities are willing to shell out millions of dollars for information about the people named. However, so far it seems that it will not be easy to get to them.
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