Authorities in the United States and Europe shut down the cryptocurrency exchange ChipMixer and filed charges against its putative owner, alleging that they had laundered more than $3 billion in illegal proceeds, including $700 million that they claim was stolen by North Korean hackers.
Since 2017, the U.S. Justice Department claims, ChipMixer has become a platform for laundering illegal assets obtained via ransomware attacks, cryptocurrency thefts, and other sorts of fraud. Users can mix their funds to conceal ownership using mixers like ChipMixer.
According to U.S. prosecutors, ChipMixer processed stolen money for the cybercriminals responsible for the $100 million hack of the Horizon bridge operated by technology company Harmony, which enables users to send cryptocurrency between various blockchains, and the $540 million hack of the online game Axie Infinity. According to the Justice Department’s complaint, which was made public on Wednesday, the U.S. has previously named Lazarus Group, an online criminal organization linked to the North Korean government, as the group responsible for both hacks.
The proceeds from ransomware made between August 2017 and March 2023, according to the prosecution, were also traceable to ChipMixer and totaled nearly $17 million in bitcoin.
According to cryptocurrency analytics company Elliptic Enterprises Ltd., the platform was also allegedly used to launder around $46 million of the estimated $370 million in cryptocurrency funds that were stolen from crypto exchange FTX shortly after it filed for bankruptcy in November.
The German federal police have seized ChipMixer’s back-end servers and more than $46 million in bitcoin as part of the operations on Wednesday. Two websites that led users to ChipMixer and a GitHub account have been taken down by American law enforcement agencies.
Minh Quoc Nguyen, a 49-year-old Vietnamese man, was also charged by US prosecutors in Philadelphia for allegedly running ChipMixer. The Federal Bureau of Investigation has issued a warrant for his arrest after he was charged with money laundering, operating an illegal money-transmitting business, and identity theft.
According to the complaint, prosecutors claim Mr. Nguyen publicly advised customers to avoid utilizing crypto exchanges with a focus on compliance that use anti-money-laundering and know-your-customer programs and gave them advice on how to use ChipMixer to get around reporting requirements.
Law enforcement in the United States is actively pursuing mixers. Authorities, legislators, and law enforcement officials have claimed that some cryptocurrency platforms give users anonymity, allowing them to use it to support terrorists, launder illegal money, or engage in public corruption.
Accusing mixer Tornado Cash of laundering billions of dollars in virtual currency, the U.S. Treasury Department imposed penalties on it in August. Since Blender.io allegedly handled money for Russian ransomware attacks, the Treasury imposed sanctions against the mixer earlier this year.
