The Security Service of Ukraine (SBU) has taken down a network of cryptocurrency exchanges that were used to anonymize transactions and also launder money.
Over 1,000 “customers” used the underground exchanges to launder money received from Yandex.Money, Qiwi, and Webmoney, among other Russian electronic payment processors.
“Criminal cryptocurrency exchanges were in high demand because they provided anonymity in transactions and the potential for money laundering,” according to the SBU.
The amount of money laundered each month was $11 million, a small fraction of the billions of dollars in bitcoin assets legitimately moved by the top 10 exchanges each month.
However, because the admins received between 5% and 10% interest on each transaction, they might still gain more than $500,000.
Following an SBU Main Directorate investigation, law enforcement officers seized the following items during searches at five locations in Kyiv’s Pecherskyi, Shevchenkivskyi, and Solomianskyi districts:
- evidence of illicit behaviour on computers and server machines;
- devices that have VPN software installed;
- seals and incorporation documents of fictitious firms registered in Ukraine that were used to launder money;
- $37,330 in cash is owed to you.
“Organizers of huge protests on the eve of Ukraine’s Independence Day were among the clients of cryptocurrency exchanges network,” the SBU noted. “They were given money to pay for provocateurs’ services through this particular network.”
Illegal crypto mining activities
Last month, the SBU announced the closure of a massive crypto mining farm that was operating in an old warehouse and stealing electricity from Ukrainian power distribution company JSC Vinnytsiaoblenerho.
Agents seized 3,800 PlayStation 4 gaming systems, over 500 graphics cards, notebooks, phones, and flash drives, as well as draft electrical consumption documents, during their searches.
According to SBU, the crypto farm’s large-scale electricity theft resulted in monthly losses of up to $260,000 a month.
The SBU is attempting to identify all those involved in the illicit activity and is probing the involvement of JSC Vinnytsiaoblenerho executives.
Following the announcement, the electrical firm refuted the SBU’s allegations of multimillion-dollar electricity theft and involvement in illegal cryptocurrency mining in any way.
A second inquiry by the Ukrainian newspaper Delo later verified their claim. According to SBU sources, the crypto mining farm was actually a bot farm used to mine in-game currency and purchase FIFA Ultimate Team loot boxes.
