Europol, along with other law enforcement agencies, has dismantled a cryptocurrency mixing service believed to be used in cybercriminal activities and money laundering schemes.
Law enforcement from Switzerland and Germany successfully took down an illegal cryptocurrency mixing service called “Cryptomixer,” which was supposedly used to launder illegal funds obtained through cybercrime.
Cryptomixer’s servers were seized in Switzerland along with the domain cryptomixer.io.
After the domain and servers were seized, law enforcement recovered 12 terabytes of data and more than $29 million worth of bitcoin.
“Cryptomixer was a hybrid mixing service accessible via both the clear web and the dark web. It facilitated the obfuscation of criminal funds for ransomware groups, underground economy forums, and dark web markets,” Europol said in a statement.
The software used by the service blocked the traceability of funds on the blockchain, making it difficult to trace the origins of the transactions.
What’s a cryptocurrency mixer?
Cryptocurrency mixers are commonly used by cybercriminals to obscure the origins of illegally obtained funds.
For example, when a ransomware gang receives a ransom payment from a victim, it needs to “wash” the money to avoid it being located by authorities.
These services essentially obscure the origin of the transaction by splitting it into smaller parts and mixing it with other users' funds.
This means that the original transaction cannot be traced back to its source, which is why it is often used by criminals.
Cryptomixing services offer their clientele anonymity and are used to clean fraudulent funds and transfer them into fiat currency, a government-backed currency.
Despite obfuscation, crypto mixers always pay
There have been many previous cases of cryptocurrency mixer services paying for their crimes.
For example, Helix, the darknet Bitcoin mixing service, was investigated by authorities, and its operator, 41-year-old Larry Dean Harmon of Akron, Ohio, was sentenced to three years in prison for running the service.
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The service was reportedly used to launder more than $311 million worth of bitcoin for customers, both globally and in the DC area, between 2014 and 2017.
And the crypto mixing service Sinbad, which allowed North Korean cybercriminals from cyber cartels like Lazarus to launder millions of dollars, was sanctioned by the US Department of the Treasury’s Office of Foreign Assets Control (OFAC).
Sinbad reportedly supported cybercriminal activities and provided technological and other support to persons who are a significant threat to US national security.
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