German and U.S. authorities today closed a “crypto mixer” allegedly used by criminals on the dark web to launder funds—and seized a load of Bitcoin in the process.
In a Wednesday announcement, Europol said it dismantled the ChipMixer platform’s infrastructure, which it described as "one of the dark web's largest cryptocurrency laundromats," and seized $42.2 million-worth of Bitcoin, along with help from Belgium, Swiss, Polish, and U.S. federal law enforcement.
A coin mixer is an app that allows users to obfuscate the origin and destination of cryptocurrency movements by grouping various transactions together.
This particular coin mixing app may have been used to assist one of the biggest crypto hacks of 2022: a blockchain data analyst posted evidence on Twitter back in November showing that ChipMixer had been used by hackers who targeted bankrupt crypto exchange FTX. Hackers targeted the failed crypto company after it went bust and drained it of $446 million in tokens.
Authorities claim ChipMixer was “unlicensed” and was “attractive for cybercriminals looking to launder illegal proceeds from criminal activities such as drug trafficking, weapons trafficking, ransomware attacks, and payment card fraud.”
New ‘Sinbad’ Bitcoin Mixer Unmasked As Formerly Sanctioned Blender
A federally sanctioned “coin mixer” used by criminals to launder money appears to have been relaunched under a different name, according to a blockchain analytics firm. "Blender is back," crypto researchers Elliptic said on Monday, explaining that the app that was sanctioned last year by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) had “highly likely” been re-launched as Sinbad. Coin mixers are platforms that allow people to anonymously send and receive cryptocurrencies...
It was also used by ransomware groups like Zeppelin, SunCrypt, Mamba, Dharma and Lockbit, authorities allege.
“This type of service is often used before criminals’ laundered crypto assets are redirected to cryptocurrency exchanges, some of which are also in the service of organized crime,” Wednesday’s announcement read.
Edward Snowden Talks Tornado Cash Sanctions, Ethereum Merge, DAOs and NFTs at Camp Decrypt 2022
In an extensive talk with Decrypt's Dan Roberts at Camp Decrypt in Napa CA in October, Edward Snowden gave his candid views on the Ethereum merge, the sanctioning of Ethereum mixer Tornado Cash by the U.S. government, the privacy shortcomings of Bitcoin and Ethereum, and his view on using DAOs to source tips from whistleblowers.
Coin mixers made headlines last year when the U.S. Treasury Department sanctioned the Tornado Cash platform because they said North Korean state-sponsored hackers were using it.
The move to target the app, which allowed people to send and receive Ethereum anonymously, upset the crypto community and some U.S. politicians who claimed people have a right to privacy.
Dutch police also arrested Tornado Cash’s main developer Alexey Pertsev.
But a demo of an update to the app—named Privacy Pools—was released earlier this month, which developers hope is designed with enough safeguards that it will not be blacklisted by authorities and will still give crypto users a degree of privacy.
