NEW DELHI: Law enforcement authorities in Germany, the United States, Belgium, Poland, and Switzerland have targeted ChipMixer – a cryptocurrency mixer popular in the cybercriminal underworld, for its alleged involvement in money laundering activities.
The investigation, supported by Europol, resulted in the takedown of the platform’s infrastructure on March 15 and the seizure of four servers, about 1909.4 Bitcoins in 55 transactions (approx. EUR 44.2 million), and 7 TB of data.
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ChipMixer, an unlicensed cryptocurrency mixer set up in mid-2017, specialised in mixing or cutting trails related to virtual currency assets. The platform blocked the blockchain trail of the funds, making it attractive for cybercriminals looking to launder illegal proceeds from criminal activities such as drug trafficking, weapons trafficking, ransomware attacks, and payment card fraud. Deposited funds would be turned into “chips,” which were then mixed together, anonymising all trails to where the initial funds originated.
The investigation suggests that the platform may have facilitated the laundering of 152,000 Bitcoins (worth roughly EUR 2.73 billion in current estimations) in crypto assets. A large share of this is connected to dark web markets, ransomware groups, illicit goods trafficking, procurement of child sexual exploitation material, and stolen crypto assets.
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Information obtained after the takedown of the Hydra Market darkweb platform uncovered transactions in the equivalent of millions of euros.
Ransomware actors such as Zeppelin, SunCrypt, Mamba, Dharma or Lockbit have also used this service to launder ransom payments they have received. Authorities are also investigating the possibility that some of the crypto assets stolen after the bankruptcy of a large crypto exchange in 2022 were laundered via ChipMixer.
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Europol facilitated the information exchange between national authorities and supported the coordination of the operation. The Joint Cybercrime Action Taskforce (J-CAT) at Europol also supported the operation. This standing operational team consists of cybercrime liaison officers from different countries who work on high-profile cybercrime investigations.
The takedown of ChipMixer is expected to have a significant impact on the cybercriminal underworld’s ability to launder money through cryptocurrency. The service was often used before criminals’ laundered crypto assets were redirected to cryptocurrency exchanges, some of which are also in the service of organised crime. At the end of the process, the ‘cleaned’ crypto can easily be exchanged into other cryptocurrencies or directly into fiat currency through ATMs or bank accounts.
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