John Isige
German and United States law enforcement agencies, with assistance from Europol, have collaborated to crack down on ChipMixer, a prominent digital currency mixer frequently utilized by cybercriminals to launder proceeds of criminal activities.
Authorities in Poland, Switzerland, and Poland gave a hand in the investigation that has now seized 7 TB of data and up to 1,909.4 Bitcoins – worth approximately 44.2 million EUR in 55 transactions.
Europol Brings Down ChipMixer As Crackdown On Money Laundering Gains Traction
According to the announcement by European Union Agency for Law Enforcement Cooperation (Europol), authorities from both governments “took down the infrastructure of the platform, believed to have perpetrated money laundering activities.”
According to Europol, ChipMixer is an unregulated cryptocurrency mixer that has been in existence since June 2017. The platform focused on “mixing or cutting trails related to virtual currency assets.”
In other words, once a blockchain transaction was intercepted by ChipMix, the trail of funds would be cut, making it extremely difficult for authorities to track down money laundering individuals and organizations.
However, ChipMixer has over the years, become very attractive to cybercriminals who are concerned about hiding the trail of funds, which mainly proceeds from illegal activities like “drug trafficking, weapons trafficking, ransomware attacks, and payment card fraud.”
Money sent to ChipMinxer via blockchain would quickly be changed into “chips,” or if you’d like small tokens each comprising an equivalent value and then mixed together. This process immediately cuts the blockchain trail, making the transactions anonymous for law enforcement authorities to track down their origins.
ChipMixer’s popularity was unmatched in the darkweb, as it guaranteed its customers full anonymity. Europol states that “this type of service is often used before criminals’ laundered crypto assets are redirected to” crypto exchange platforms.
The law enforcement authority reckons that some crypto exchange companies are part of organized crime syndicates. After the funds are deposited into crypto exchange wallets, they can be swapped with other digital assets, or converted to fiat currencies via bank accounts or ATMs.
Mixer Helped Launder 152, 000 Bitcoins Through “Chips”
Investigation into the operations of the criminal enterprise found that ChipMixer has in the past 6 years been used to facilitate the laundering of up to 152,000 BTC – worth approximately $3 billion at the current exchange rate.
The majority of the funds passed through ChipMixer’s technology were connected to darkweb-based markets, illicit goods and trafficking services, ransomware groups, crypto assets hacking proceeds, and the “procurement of child sexual exploitation material.”
Following the dismantling of Hydra Market on the darkweb, authorities discovered financial transactions totaling millions of euros.
Europol mentioned some criminal organizations that have in the past tapped the services offered by ChipMixer, including SunCrypt, Zeppelin, and Dharma aka Lockbit have all used the platform to launder ransom money.
According to the Department of Justice (DoJ), Minh Quốc Nguyễn, a ChipMixer operator based in Hanoi, Vietnam, was recently accused in Philadelphia of committing money laundering, running an unlicensed money transmitting service, and engaging in identity theft.
The DoJ added ChipMixer also facilitated numerous illegal activities, involving more than $700 million worth of Bitcoin. Some of these wallets have been linked to stolen funds, including those stolen by North Korean cyber attackers.
Additionally, ChipMixer was used by the Russian General Staff Main Intelligence Directorate (GRU) to acquire infrastructure for Linux-based malware named Drovorub.
It is believed ChipMixer’s services became even more attractive in August 2022 around the time Tornado Cash, an Ethereum-based mixer came under the radar of the US Treasury Department’s Office of Foreign Asset Control. Tornado Cash was accused of assisting with North Korea-based money laundering activities.
Europol To Continue The Investigation Into ChipMixer
Investigations into ChipMixer are set to continue, with authorities hoping to figure out of funds stolen from Sam Bankman-Fried’s FTX exchange, which went bankrupt in 2022, were laundered through the platform.
Europol was in charge of organizing and facilitating the flow of information between all the national authorities involved. It was also in charge of coordinating support and key operations for the investigation.
Europol provided analytical assistance by linking accessible information to different illegal cases both inside and outside the European Union—and backed up the inquiry with operational evaluation, crypto tracking, and scientific analysis.
J-CAT, Joint Cybercrime Action Taskforce was also involved in the investigation. The taskforce is comprised of cybercrime liaison officers from various countries, working on high-profile cybercrime investigations.
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This article was written for Business 2 Community by John Isige.
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