The recent crackdown on the cryptocurrency mixer ChipMixer by a joint investigation led by German and US authorities, with the support of Europol, Belgium, Poland, and Switzerland, has sent shockwaves through the cybercrime world. The operation, executed on Wednesday, resulted in the takedown of ChipMixer infrastructure and the seizure of four servers, 7TB of data, and 1909.4 Bitcoins, equivalent to roughly $47.3 million, from 55 transactions.
It has been reported that most of the seized funds had ties to dark web markets, stolen crypto assets, ransomware groups, illicit goods trafficking, and the procurement of child sexual exploitation material. ChipMixer, an unlicensed cryptocurrency mixer established in mid-2017, specialized in mixing or cutting trails related to virtual currency assets. The software developed by ChipMixer threat actors was used to obfuscate the blockchain trail of funds, allowing cyber-criminals to launder illegal proceeds by turning deposited funds into ‘chips’ that were mixed and anonymized.
According to Europol, at the end of the process, the ‘cleaned’ crypto could easily be exchanged into other cryptocurrencies or directly into FIAT currency through ATMs or bank accounts. Several ransomware actors, including Zeppelin, SunCrypt, Mamba, Dharma, and Lockbit, utilized ChipMixer to launder ransom payments they received. The takedown of ChipMixer has been hailed as a significant victory in the ongoing fight against crypto money laundering by US authorities and their allies.
Roger Grimes, a data-driven defense evangelist at KnowBe4, praised the takedown, stating that it is always a good day when a crypto money launderer engaged in illegal activity is apprehended. However, he noted that there has been a slight increase in mixers using improved methods to hide the identities and amounts of transactions from the public blockchain. This trend may make it more challenging to track the flow of illicit funds in the future.
The operation against ChipMixer comes on the heels of the US national Cryptocurrency Enforcement Team’s arrest of a Russian national suspected of playing a crucial role in the now-defunct dark web marketplace Hydra. These coordinated efforts by law enforcement agencies highlight the growing crackdown on illegal activities in the cryptocurrency space.