The Department of Justice on Wednesday announced that it has dismantled a darknet cryptocurrency mixer known as ChipMixer for enabling cyber criminals to launder more than $3 billion of cryptocurrency.
Authorities said they had seized two domains that directed users to the mixing service.
According to the DOJ, ChipMixer was also involved in other illegal activities including ransomware, fraud, cryptocurrency heists and other hacking schemes.
“This morning, working with partners at home and abroad, the Department of Justice disabled a prolific cryptocurrency mixer, which has fueled ransomware attacks, state-sponsored crypto-heists and darknet purchases across the globe,” said Deputy Attorney General Lisa Monaco in a statement.
The agency also charged Minh Quốc Nguyễn, a Vietnamese operator of ChipMixer, with money laundering, operating an unlicensed money transmitting business and identity theft.
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According to DOJ officials, ChipMixer allowed users to deposit bitcoin which it then used to mix with other users’ bitcoin funds, making it difficult for authorities to trace the source of the transactions.
Crypto mixers like ChipMixer are often used by individuals or groups that want to make their transactions anonymous and harder to trace by mixing their funds with others on the blockchain.
According to the complaint, “ChipMixer attracted a significant criminal clientele and became indispensable in obfuscating and laundering funds from multiple criminal schemes.”
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The DOJ alleged that the mixing service processed $17 million in bitcoin for criminals tied to about 37 types of ransomware.
This is the latest action taken by the U.S. government to crack down on cryptocurrency mixers that allow cyber criminals to use their platforms to conduct illegal transactions.
Last year, the Treasury Department sanctioned Tornado Cash, another cryptocurrency mixer, for helping hackers launder more than $7 billion worth of virtual currency.
According to the agency, Tornado Cash allowed cyber groups, including North Korean-backed hackers, to use its platform to launder the proceeds of cybercrimes.
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For instance, a state-sponsored hacking group, known as the Lazarus Group, tied to North Korea used Tornado Cash to steal more than $455 million in cryptocurrency, the largest known virtual currency heist to date, the department said.
“Criminals have long sought to launder the proceeds of their illegal activity through various means,” said Special Agent in Charge Jacqueline Maguire of the FBI Philadelphia Field Office in a statement. “Technology has changed the game, though, with a site like ChipMixer and facilitator like Nguyen enabling bad actors to do so on a grand scale with ease.”
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