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Date: March 20th 2023
Published on: Global News
ChipMixer, Crypto AML, Cryptocurrency, Mixer, RiskAML,
Last week, the US and Germany, with support from Belgium, Poland, Switzerland, and Europol, announced the shutdown of ChipMixer, one of the largest crypto mixing services. The shutdown is related to Chipmixer’s alleged involvement in money laundering activities. The action resulted in the seizure of over 1,900 BTC in 55 transactions and 7 TB of data.
ChipMixer was a crypto mixer (or mixing service) founded in 2017 and operated in Vietnam. ChipMixer services were available both on the clear and dark web. Cybercriminals used it to launder illegal proceeds from criminal activities such as drug and weapons trafficking and ransomware attacks.
A mixer is an online service allowing users to tumble their crypto funds with others. It makes it harder to follow the funds on blockchains and enhances user pseudonymity. Cybercriminals often use mixing services to launder ill-gotten funds. They can deposit their tainted coins into the mixer and withdraw “clean” funds once they have been mixed with others. The “clean” funds can then be easily exchanged for other assets.
For instance, the Lazarus Group, the DPRK-state-sponsored cybercrime group behind the Ronin heist, used ChipMixer and Tornado Cash, another well-known mixer, to launder the stolen funds.
According to its investigation, Europol states that ChipMixer has helped launder 152,000 BTC (over EUR 2.7 billion) in connection with various criminal activities such as dark web services, ransomware, stolen funds, etc. Looking at Chipmixer’s wallet on Scorechain Analytics, we can see that hackers have used the service to launder funds stolen from Harmony Bridge, FTX, Ronin, or AcendEX.
The joint operation also allowed the US to charge a Vietnamese national with money laundering, operating an unlicensed MSB, and identity theft in connection with ChipMixer operations. If convinced, he faces a maximum prison sentence of 40 years.
The shutdown of ChipMixer shows that international cooperation is essential in cracking down on illegal activities in the crypto world. As cybercrime and the use of crypto in illicit activities continue to rise, blockchain analytics tools are essential for law enforcement agencies to combat these threats and for companies to avoid these activities in compliance with regulations.
Scorechain Analytics can help businesses and institutions trace and monitor crypto transactions, detect suspicious activities, and prevent money laundering and other illegal activities. Learn more.
Scorechain provides a blockchain analytics and transaction monitoring platform for crypto assets. As a leader in crypto compliance, the Luxembourgish company has helped over 200 customers in 45 countries since 2015, ranging from cryptocurrency businesses to financial institutions with crypto trading, custody branch, digital assets, customers onboarding, audit and law firms, and some LEAs.
Scorechain’s platform provides identifying data and risk assessment for comprehensive blockchains. The platform connects to different sources and block lists to provide risk scoring on crypto assets, transactions, addresses, and entities. The risk assessment methodology applied by Scorechain has been verified and is fully customizable to fit all jurisdictions. Customers can monitor infinite possibilities of risk scenarios with a wide range of parameters provided so businesses under the scope of the crypto regulation can report suspicious activity to authorities with enhanced due diligence.