Authorities Took Down Crypto-Mixing Platform ChipMixer for Laundering $3B

Law enforcement agencies in the United States and Germany took down cryptocurrency-mixing service provider ChipMixer, which <a href=”https://www.financemagnates.com/cryptocurrency/news/cryptocurrency-money-laundering-climbs-30-in-2021/” target=”_blank” rel=”follow”>laundered more than $3 billion </a>worth of digital currencies since 2017. Though the platform operated on the dark web, it also had a clearnet web front.

Law Enforcement Busts ChipMixer

Announced on Wednesday, the US federal law enforcement seized two domains directed to the ChipMixer service and a GitHub account. The German authorities forfeited the four ChipMixer back-end servers and $46 million in cryptocurrency.<blockquote class=”twitter-tweet”>Darknet crypto mixer ChipMixer seized and a Vietnamese National charged for allegedly laundering over $3 billion./chipmixer.com<a href=”https://twitter.com/hashtag/cybersecurity?src=hash&ref_src=twsrc%5Etfw”>#cybersecurity</a> <a href=”https://twitter.com/hashtag/infosec?src=hash&ref_src=twsrc%5Etfw”>#infosec</a> <a href=”https://twitter.com/Bitcoin?ref_src=twsrc%5Etfw”>@Bitcoin</a> <a href=”https://t.co/fiy1BCAHYA”>pic.twitter.com/fiy1BCAHYA</a>— Dominic Alvieri (@AlvieriD) <a href=”https://twitter.com/AlvieriD/status/1636228837968166914?ref_src=twsrc%5Etfw”>March 16, 2023</a></blockquote>
Further, the US prosecutors also charged the Vietnam-based Minh Quốc Nguyễn for operating ChipMixer. The 49-year-old man is facing charges of money laundering, operating an unlicensed money-transmitting business, and identity theft, which carries a maximum prison time of 40 years.

“We will not allow cybercriminals to hide behind keyboards nor evade the consequences of their illegal actions Countering cybercrime requires the ultimate level of collaboration between and among all law enforcement partners,” said FBI Deputy Director Paul Abbate.

Indeed, along with US and German law enforcement, the authorities in Belgium, Poland, and Switzerland, along with Europol, also supported the investigation.

The Dirty Business of Crypto Mixers

ChipMixer was one of the largest <a href=”https://www.financemagnates.com/cryptocurrency/the-united-states-blacklisted-tornado-cash-the-crypto-industry-reacts/” target=”_blank” rel=”follow”>crypto-mixing services</a> that facilitated criminals to launder their ill-gotten proceeds. It provided services to several US-based customers but was not registered with the Financial Crimes Enforcement Network and did not collect information on its customers. The platform offered complete anonymity to its customers.

According to the court documents, ChipMixer processed $17 million in Bitcoin connected to 37 ransomware strains; over $700 million in Bitcoin from wallets containing stolen funds, including from the Axie Infinity’s Ronin Bridge and Harmony’s Horizon Bridge attacks; more than $200 million in Bitcoin connected to darknet markets; and over $35 million in bitcoin directly or indirectly associated with fraud shops.

The crypto mixing service also processed Bitcoins used by the Russian General Staff Main Intelligence Directorate for purchasing infrastructure for the Drovorub malware.

“ChipMixer facilitated the laundering of cryptocurrency, specifically Bitcoin, on a vast international scale, abetting nefarious actors and criminals of all kinds in evading detection,” said Jacqueline Romero, US Attorney for the Eastern District of Pennsylvania. “Platforms like ChipMixer, which are designed to conceal the sources and destinations of staggering amounts of criminal proceeds, undermine the public’s confidence in cryptocurrencies and blockchain technology.”

Law enforcement agencies around the world are now actively tackling the rising cybercrimes. Though decentralized blockchain technology brings new challenges to law enforcement, tracking down cybercriminals stealing cryptocurrencies is possible.

Earlier this year, the Norwegian police <a href=”https://www.financemagnates.com/cryptocurrency/norway-seizes-58m-in-crypto-from-north-korean-hackers/” target=”_blank” rel=”follow”>seized $5.85 million in cryptocurrencies</a> stolen by North Korean hackers from Ronin Network, the blockchain supporting the popular crypto-based game Axie Infinity. In November 2021, the US authorities revealed the <a href=”https://www.financemagnates.com/cryptocurrency/us-seizes-36-billion-worth-of-bitcoins-linked-to-silk-road/” target=”_blank” rel=”follow”>seizure of over 50,676 Bitcoins </a>(then worth over $3.36 billion) stolen from the notorious dark web marketplace, Silk Road, in 2012. It was the second largest financial seizure by the US authorities following the <a href=”https://www.financemagnates.com/cryptocurrency/36b-btc-seizure-from-bitfinex-hack-good-or-bad-for-the-industry/” target=”_blank” rel=”follow”>forfeiture of $3.6 billion in stolen cryptocurrencies</a> linked to the 2016 Bitfinex hack.

Last year, the UK National Crime Agency (NCA) also revealed its intentions to <a href=”https://www.financemagnates.com/cryptocurrency/regulation/uk-agency-wants-regulations-on-crypto-mixing-services/” target=”_blank” rel=”follow”>regulate cryptocurrency mixing technologies</a>. In 2019, the Dutch Fiscal Information and Investigation Service (FIOD), along with Europol and Luxembourg authorities, <a href=”https://www.financemagnates.com/cryptocurrency/news/european-agencies-shut-bestmixer-ios-crypto-mixing-service/?utm_source=dlvr.it&amp%3Butm_medium=facebook” target=”_blank” rel=”follow”>closed down the cryptocurrency mixing services of Bestmixer.io</a>, which was one of the market leaders at the time.

This article was written by Arnab Shome at www.financemagnates.com.