The Federal Bureau of Investigation (FBI) and Ukrainian police seized nine cryptocurrency exchange websites that facilitated money laundering for scammers and cyber criminals, including ransomware actors.
Late last month, the operation was conducted with court authorization and assistance from the FBI’s Detroit Field Office, the Virtual Currency Response Team (VCRT), the Cyber Police Department, and the Main Investigation Departments of the National Police of Ukraine, and the Prosecutor General’s Office of Ukraine.
The organizations involved in cryptocurrency conversions and assisting cyber-criminals had their domain names seized and related servers shut down. U.S. authorities took offline servers used in the scheme that were based in the U.S. The nine domains that were seized are 24xbtc.com, 100btc.pro, pridechange.com, 101crypta.com, uxbtc.com, trust-exchange.org, bitcoin24.exchange, paybtc.pro, and owl.gold. These domains provided anonymous cryptocurrency exchange services to visitors of their websites.
Virtual currency exchanges that do not comply with anti-money laundering regulations or collect minimal Know Your Customer (KYC) information, or none at all, are important hubs in the cybercrime ecosystem because they offer anonymity and facilitate the laundering of money obtained through criminal activities, according to the FBI
KYC refers to the process of verifying the identity of a customer or client, typically for financial institutions or businesses that engage in financial transactions. KYC procedures are designed to prevent identity theft, financial fraud, money laundering, and terrorist financing.
The information typically includes personal information such as the customer’s full name, date of birth, address, and government-issued identification documents such as a passport or driver’s license.
Last week, the FBI and international partners disrupted nine virtual currency exchange services which facilitated money laundering and allowed users to avoid law enforcement detection. #CyberIsATeamSport https://t.co/GqtlzI7g2b pic.twitter.com/sCllgynKnZ
— FBI (@FBI) May 2, 2023
Read more: Mastercard launches Crypto Credential service for cross-border transfers
Read more: Joint European task force takes down darkweb money laundering platform ChipMixer
Law enforcement can use information to unmask cyber criminals
Criminals often advertise these non-compliant services on online forums that focus on discussing criminal activity. By knowingly providing these services, the virtual currency exchanges support the criminal activities of their clients and become co-conspirators in criminal schemes.
The website servers were seized in various countries, including the United States, Ukraine, and several European countries. Law enforcement officials can analyze the seized infrastructure and the information be used to unmask cybercriminals who used the sites for money laundering and additional arrests in the future.
Crackdowns on cryptocurrency laundering networks are crucial because these platforms enable hackers to continue their extortion activities without being detected and use the stolen funds in the real world. By dismantling these networks, law enforcement agencies can disrupt cybercriminal activities and prevent future crimes.
The investigation is currently ongoing, and visitors to the sites will now see a seizure banner indicating that federal authorities have seized the domain name. Operating an unlicensed money service business and facilitating money laundering is a federal crime, and the banner serves as a notification of the seizure.
In March, the FBI, Europol, and the German police conducted an operation that resulted in the seizure of the ‘ChipMixer’ cryptocurrency mixing service. This service was being used by hackers, ransomware gangs, and scammers to launder their proceeds.
On April 24, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced sanctions against brokers who supported North Korean cryptocurrency laundering networks. These actions are part of the ongoing efforts to crack down on the use of cryptocurrency for illegal activities.
At the beginning of the year, the U.S. Department of Justice arrested the founder of Bizlato, a Hong Kong-registered cryptocurrency exchange. The founder was arrested on allegations of helping cybercriminals launder illegally obtained money. These actions demonstrate the increasing focus of law enforcement agencies on combatting cryptocurrency-related crimes.
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joseph@mugglehead.com
