5 Biggest Crypto Money Laundering Schemes of All Time

Because cryptocurrencies are used for money laundering and other activities, the business has become more well-known over time.

Authorities from the US government accused Samourai Wallet, a cryptocurrency mixer service, of money laundering in late April 2024. Cybercriminals allegedly utilized Samourai Wallet to laundere over $100 million in cryptocurrency.

Crypto Money Laundering Explained

In the cryptocurrency world, money laundering is the process of hiding stolen cryptocurrency funds so that they can be spent without the illicit conduct that created them being discovered.

Bitfinex Hack : One of the biggest cryptocurrency exchanges in the world at the time, Bitfinex, experienced a hack for 120,000 Bitcoins (BTC) in August 2016. One of the largest cryptocurrency hacks ever, the stolen funds had a $7.73 billion market value as of April 26, 2024, when bitcoin was trading for $64,450.

Ilya Lichtenstein and his wife Heather Morgan were detained on February 8, 2022, allegedly for plotting to launder the hack’s gains, according to the U.S. Department of Justice (DoJ). According to reports, Lichtenstein and Morgan used a “labyrinth of cryptocurrency transactions” to launder the stolen money.

The couple registered online accounts at cryptocurrency exchanges under false pretenses in order to take money out.

Tornado Cash Service : Users can render their cryptocurrency untraceable by using the Tornado Cash cryptocurrency mixer service. The service combines a user’s tokens with a collection of other cryptocurrencies to obfuscate the origins of the token.

Tornado Cash was a tool used by hackers and criminals to hide the money trail connected to their illicit operations and to launder money that has been stolen. The U.S. Department of Justice (DoJ) prosecuted Roman Storm and Roman Semenov, the co-founders of Tornado Cash, in August 2023 for starting and advertising the company.

Ronin Bridge Exploit : The largest decentralized finance (DeFi) hack to date occurred in March 2022 when the gaming-focused blockchain Ronin Network was breached for over $600 million in Ether (ETH) tokens and USDC stablecoin.

The North Korean hacker group Lazarus Group reportedly obtained access to five of the nine private keys that transaction validators for Ronin Network’s cross-chain bridge were holding. This information was provided by blockchain analytics firm Chainalysis.

25.5 million USDC coins and 173,600 ETH tokens were approved for withdrawal using the keys. After then, Lazarus Group used more than 12,000 distinct crypto addresses to carry out an extremely complex money-laundering method.

Bitcoin Mist : The world’s oldest Bitcoin money laundering service is reportedly called Bitcoin Fog.

The U.S. Department of Justice claims that Bitcoin Fog ran from 2011 until 2021. Over 1.2 million Bitcoins, valued at $400 million at the time of the transactions, are reportedly believed to have been moved by Bitcoin Fog during that period.

Roman Sterlingov, a dual Swedish-Russian national, was found guilty in March 2024 by a U.S. court of running Bitcoin Fog.

Wallet Samourai : Coinciding with the Tornado Cash accusations, in April 2024 the U.S. Department of Justice (DoJ) accused the co-founders of Samourai Wallet, a cryptocurrency mixer service, of money laundering violations.

The cryptocurrency wallet Samourai Wallet was created in 2015 by William Lonergan Hill and Keonne Rodriguez. The wallet included two features that aided in money laundering, according to the DoJ.

  • In order to hide the fund trail, Samourai Wallet users coordinated batches of bitcoin trades using a function called “Whirlpool.”
  • When transmitting cryptocurrency from one address to another, wallet users could perform “hops,” or intermediate transactions, thanks to a technology called “Ricochet.”

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