Two Russians have been indicted by the US DOJ for a billion-dollar crypto fraud

The US Department of Justice (DOJ), in cooperation with state and Treasury agencies and other federal and international law enforcement groups, has indicted two Russian nationals in the fight against money laundering.

Authorities released documents that included several money-laundering services that cybercriminals were able to exploit and seized websites linked to illegal cryptocurrency exchanges.

The US DOJ has seized $1 billion from Russia's illegal hacking services

Sergei Ivanov and Timur Shakmametov, Russian nationals, made millions of dollars by facilitating money laundering. Ivanov, alias “Talion”, has been a professional cyber money counterfeiter for nearly two decades.

It enables bank fraud and supports payment processing for the well-known Rescator website, which illegally buys and sells stolen credit and debit card information. Rescator trafficked stolen payment card information from US financial institutions and personally identifiable information (PII) from US citizens. Ivanov further reinforced his role in cybercrime with the proceeds from Rescatter and related card site Joker's Stash.

“Over the years, Ivanov's impersonation services and payment systems have served cybercriminal marketplaces, ransomware groups, and hackers responsible for major data breaches at major US companies,” the report reads.

Read more: Crypto Regulation: What are the Pros and Cons?

Cryptocurrency blockchain analysis revealed key details of Ivanov's counterfeiting. He showed:

Between July 12, 2013 and August 10, transactions worth a total of $1.15 billion were sent to these addresses, with nearly 32% of Bitcoin (BTC) originating from cryptocurrency addresses linked to other criminal activities. Over $158 million worth of BTC flowed into Ivanov's addresses, representing fraud proceeds. They represented over $8.8 million in proceeds from known ransomware payments. About $4.7 million came from darknet drug markets.

Timur Shakmametov, also known as “JokerStash” or “Vega”, has been charged with being an accomplice to money laundering, a specific charge related to the sale of data from 40 million payment cards each year. This operation made him a key figure in one of the largest carding markets in history, widely known in cybercrime circles.

Authorities have finally shut down an illegal cryptocurrency exchange linked to the Cryptex.net and Cryptex.one domains. The platform has become a haven for criminals for violating Know Your Customer (KYC) norms. Research has shown that Cryptocurrency has made $1.4 billion in Bitcoin transactions, 31 percent of which are linked to criminal activity. Additionally, 28% of Bitcoin sent from Cryptex was diverted to US sanctioned entities or Darknet markets.

Authorities target organizations that support crypto crime

The development adds to the thread of US authorities' crackdown on Russia-related cybercrime, particularly where crypto is used to evade sanctions. In March, the US Treasury's Office of Foreign Assets Control (OFAC) expanded its sanctions against Russia, targeting individuals and entities in the country's financial and technology sectors.

In April, the US Treasury warned that Russia was using its Tether (USDT) stablecoin to evade sanctions and fund military operations. This led authorities to freeze all US assets and property interests of thirteen entities and two individuals.

Russian criminals are said to be using crypto to circumvent Western restrictions, buy deals and facilitate allegedly illegal transactions. Other crimes cited include converting Russian rubles into USDT and effectively circumventing the payment and presence of foreign suppliers.

Read more: 8 Best Crypto Wallets to Store Tether (USDT)

This report, as enabled by blockchain analysis, shows the high level of use of crypto for illegal financing, including terrorism. It fuels the debate over the importance and scope of strict crypto regulations.

Some legislators support aggressive regulatory measures, while others argue for a balanced approach to avoid stifling innovation in the digital property sector.