In a landmark effort against cybercrime, global authorities have taken down ChipMixer, a cryptocurrency site commonly used by cybercriminals.
According to Europol, cybercriminals utilized the network to launder illegal revenues from drug trafficking, arms trafficking, ransomware attacks, and payment card fraud.
Europol reported that it backed authorities in Germany, the United States, Belgium, Poland, and Switzerland in disabling ChipMixer's infrastructure.
According to Reuters, the takedown resulted in the seizure of up to 40 million euros ($42.2 million) in funds. ChipMixer, an unregulated cryptocurrency mixer, was founded mid-2017 and specialized in cutting or mixing virtual currency asset traces.
How Fraudsters Use Crypto to Launder Money
Since cryptocurrencies are designed to be anonymous and decentralized, cybercriminals use them to launder money - possibly their best way to hide the loot from the law.
Also, crypto enables a safe placement of funds by obscuring any point of origin. Even creating a free account or address takes only a few seconds and costs nothing.
Each account may be used several times to receive funds and transfer them to another account. With a computer script, it is possible to establish a big money laundering scheme involving thousands of transfers at a cheap cost, a UNODC initiative against synthetic drugs tells us.
It is also widely known that crypto assets are volatile, which justifies any sudden or rapid rise or dip in exchange rates.
This is where platforms like ChipMixer come into play. ChipMixer and other similar tools "blend" or "mix" potentially identifiable crypto funds in order to render them untraceable.
How do they do this? The UNODC states that cryptocurrency funds from multiple sources are initially delivered to a single address.
After the funds have been mixed/blended together in that one address, they are divided and delivered to multiple addresses.
Before the money arrives at its final destination, this process may be repeated multiple times - completing an elaborate shuffle.
As a result, it is nearly impossible to trace the origin of the payments, making cryptocurrencies an enticing option for hackers and fraudsters.
Crypto Gave Rise to Cybercrime Cases
According to a report by blockchain data company Chainalysis, criminals laundered $8.6 billion worth of cryptocurrencies in 2021. This is a 30% rise compared to the prior year.
Chainalysis argues that police could dramatically disrupt criminal networks by targeting critical services utilized for crypto laundering.
According to the report, most crypto laundering occurs through a few services, such as criminals' preferred exchanges. Stopping these services could significantly affect the amount of cryptocurrencies that are laundered.
In recent years, cybercrime has become more sophisticated, and the usage of cryptocurrencies has played a big part in this.
It is worth noting that crypto platforms such as ChipMixer are not banned in some countries. However, they become a concern when utilized to launder the proceeds of criminal activity.
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Related Article: North Korea Has Reportedly Plundered $1.2 Billion in Crypto Funds, According to South Korea's Spy Agency
