US authorities have sanctioned two Russian cryptocurrency exchanges, uncovering a staggering $720 million in laundered funds from ransomware operations. The crackdown shines a light on the role of Russia-based platforms in fueling global cybercrime.
US Sanctions Russian Crypto Exchanges
Two Russian individuals and two cryptocurrency exchanges are facing sanctions from the US government due to allegations of illegal Russian funding. Participating departments included Treasury, Justice, and State, as well as a number of foreign law enforcement organizations.
Treasury Designates PM2BTC as a Money Laundering Concern
The Russian cryptocurrency exchange PM2BTC and its partner Sergey Ivanov have been designated as a "primary money laundering concern" by the Financial Crimes Enforcement Network (FinCEN) of the U.S. Treasury Department.
Meanwhile, according to Cointelegraph, Ivanov and another cryptocurrency exchange, Cryptex, have been sanctioned by the Office of Foreign Assets Control (OFAC) of the United States Treasury.
Illegal Operations Funded Through Ransomware
Allegedly, PM2BTC handles the money that comes from ransomware and other illegal operations. According to FinCen, half of its operations are associated with illicit enterprises. Chainalysis reports that the underground payment processing system UAPS (Universal Anonymous Payment System) and PM2BTC share wallet infrastructure.
Cryptex uses Russian in their ads despite having a St. Vincent and the Grenadines registration. The Treasury states:
"Cryptex is also associated with over $720 million in transactions to services frequently used by Russia-based ransomware actors and cybercriminals, including fraud shops, mixing services, exchanges lacking KYC programs, and OFAC-designated virtual currency exchange Garantex."
The seizure of web domains and infrastructure related to PM2BTC, Cryptex, and Ivanov was acknowledged by the US Secret Service Cyber Investigative Section, the Netherlands Police, and the Dutch Fiscal Intelligence and Investigation Service by the Treasury Department. Both Chainalysis and Tether were listed as having contributed to the endeavor.
Russian Individuals Face Conspiracy Charges
According to court records from the District Court of Eastern Virginia, Ivanov faced one count of conspiracy to commit and aid and abet bank fraud involving websites that participate in "carding," or the trade of stolen credit card details.
One count of conspiracy to commit access device fraud, one count of conspiracy to commit money laundering, and one count of conspiracy to commit and assist and abet bank fraud were all related to the operations in which Timur Shakhmametov was accused.
$10 Million Reward for Information on Russian Operatives
There is a reward of up to $10 million being offered by the State Department for information that leads to the arrest and/or conviction of Ivanov or Shakhmametov.