As part of a transnational effort to dismantle a global money laundering network, U.S. authorities seized websites connected with crypto trading platforms and charged a pair of Russians for their involvement with those platforms.
The U.S. Department of Justice (DoJ) charged Sergey Ivanov with money laundering conspiracy and bank fraud conspiracy, alleging that he’s worked as a professional online money launderer for almost 20 years, serving cybercriminals, ransomware groups and hackers that have carried out significant data breaches against U.S. companies.
The charges stem from Ivanov’s alleged provision of payment processing and money laundering services to websites that trade in credit card and debit card information stolen from U.S. financial institutions.
“Cryptocurrency blockchain analysis revealed that between July 12, 2013, and Aug. 10, cryptocurrency addresses associated with Ivanov’s alleged money laundering services conducted transactions totalling approximately US$1.15 billion,” the DoJ said in a release on Thursday, adding that approximately a third of the cryptoassets sent to these addresses originated from addresses that are “associated with criminal activity.”
In the same indictment, another Russian, Timur Shakhmametov, was charged with conspiracy to commit bank fraud, money laundering, and access device fraud.
Separately, the U.S. Secret Service executed seizure orders against website domain names connected with a crypto exchange that’s allegedly used for money laundering, Cryptex.net.
The DoJ said blockchain analysis on addresses connected to Cryptex found that it executed US$1.4 billion in transactions — and that about 31% originated from addresses that are associated with criminal activity, including fraud and ransomware.
“The seizure of these domains by the government will prevent the owners and third parties from using the sites for money laundering,” the DoJ reported.
Dutch law enforcement authorities also seized servers hosting the crypto exchanges, along with US$7 million in crypto, it noted.
The U.S. State Department offered US$10 million rewards for information leading to the arrest and/or conviction of Ivanov and Shakhmametov, and US$1 million for help identifying others involved in the operation of the exchanges and related websites.
The U.S. Department of the Treasury also issued orders designating crypto exchanges associated with Ivanov as “primary money laundering concerns” — actions that prohibit regulated financial institutions from transmitting funds to them.
“Today’s actions highlight the department’s continued disruption of malicious cyber actors and their criminal ecosystem,” said deputy U.S. attorney general, Lisa Monaco, in a release on Thursday.
“The two Russian nationals charged today allegedly pocketed millions of dollars from prolific money laundering and fueled a network of cyber criminals around the world, with Ivanov allegedly facilitating darknet drug traffickers and ransomware operators. Working with our Dutch partners, we shut down Cryptex, an illicit crypto exchange and recovered millions of dollars in cryptocurrency,” she added.
The allegations have not been proven.