The US has sanctioned virtual currency exchanges Cryptex and PM2BTC for facilitating illegal activities

The US has sanctioned virtual currency exchanges Cryptex and PM2BTC for facilitating illegal activities

Pierluigi Paganini
September 27, 2024

The US government has sanctioned virtual currency exchanges Cryptex and PM2BTC for facilitating cybercrime and money laundering.

The US government has sanctioned two cryptocurrency exchanges, Cryptex and PM2BTC, and charged a Russian national for allegedly facilitating cybercriminal activity and money laundering. Authorities believe that these exchanges facilitate the laundering of cybercrime proceeds.

“The Department of Justice today announced actions coordinated with the State Department, the Treasury Department, and other federal and international law enforcement partners to combat Russian money laundering operations.” reads the DoJ press release. “The actions included the unveiling of an indictment accusing a Russian national of his involvement in operating multiple money laundering services that targeted cybercriminals, as well as the seizure of websites linked to three illegal cryptocurrency exchanges.”

Russian national Sergey Ivanov (aka “Taleon”) has been charged with conspiracy to commit bank fraud and money laundering, according to court documents. Ivanov is alleged to have supported the card website Rescator and laundered the proceeds from Joker’s Stash. For almost twenty years, Ivanov operated as a cyber money launderer. US authorities say the Russian offered his services through Russian-language forums and supported the activities of cybercrime marketplaces, ransomware groups and threat actors behind major US data breaches.

Ivanov allegedly operated the Russian payment and exchange services UAPS, PinPays and PM2BTC, which enabled money laundering for criminals. Blockchain analysis found that Ivanov’s services handled approximately $1.15 billion in transactions between July 2013 and August 2023, with 32% of traced bitcoin linked to criminal activity. This included more than $158 million in fraud, $8.8 million in ransomware payments and $4.7 million in darknet drug markets. The US Secret Service has seized the domains associated with the UAPS and PM2BTC websites.

The US Secret Service, together with Dutch authorities, has seized the domains and infrastructure related to PM2BTC, UAPS and Cryptex. The U.S. Department of State has also announced a reward of up to $10 million for information leading to the arrest or conviction of Sergei Ivanov through its Transnational Organized Crime Rewards Program.

“As outlined in the order, PM2BTC facilitates convertible virtual currency (CVC) laundering linked to ransomware and other illegal actors operating in Russia. PM2BTC provides direct CVC to Ruble exchange services using US-sanctioned financial institutions, otherwise facilitates sanctions evasion, and has failed to maintain a credible and effective anti-money laundering and know-your-customer program ( KYC). FinCEN found that almost half of PM2BTC’s exchange activities were related to illicit activities, and accordingly that PM2BTC facilitates a significantly higher share of transactions with clear links to money laundering activities related to Russian illicit financing, compared to 99 percent of other services for virtual assets. providers.” reads the published report from the US Treasury Department. “FinCEN also found that PM2BTC uses an unusual obfuscation that prevents the attribution of transactions to illegal activities and actors. Notably, the same technique has been used by several worrying virtual currency exchanges, some of which have been approved by OFAC. “

Authorities also charged Russian national Timur Shakhmametov, also known as “JokerStash” and “Vega,” with bank fraud, access device fraud and money laundering.

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Pierluigi Paganini

(Safety matters – hacking, virtual currency exchanges)