Russia Arrests 100 in Cryptex Crypto Exchange Crackdown – Source: www.databreachtoday.com

Blockchain & Cryptocurrency
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Cryptocurrency Fraud
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Fraud Management & Cybercrime

US-Sanctioned Crypto Exchange Founder Sergey Ivanov Included in Sweeping Arrests

Chris Riotta (@chrisriotta) •
October 4, 2024    

Russia has arrested nearly 100 suspects with alleged ties to the sanctioned Cryptex cryptocurrency exchange and other platforms used for illegal transactions after launching a rare investigation into a domestic cybercriminal network.

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Sergey Ivanov, an alleged founder of the crypto exchange described by Russian federal police as a key suspect in the Kremlin’s investigation, was taken into custody along with at least 95 other individuals, according to the Investigative Committee of the Russian Federation. The announcement comes after the United States sanctioned Cryptex and Ivanov last week for allegedly laundering over $720 million in funds from Russian ransomware groups.

Russia’s primary federal investigative agency is probing Cryptex, as well as the anonymous payment service dubbed UAPS and 33 additional online services that have been used to sell stolen credentials and illegally transfer funds to cybercriminals beginning in 2013, according to the Wednesday statement by Russian authorities. The announcement says the suspects “carried out illegal activities in exchanging currencies and cryptocurrencies, delivering and accepting cash, and selling bank cards and personal accounts,” according to machine translation.

“The main clients of these services were cybercriminals and hackers who used them to legalize their criminal income,” authorities said.

The U.S. Treasury Department called Ivanov a “primary money laundering concern” associated with Russian illegal financial transactions in September and accused him of laundering “hundreds of millions of dollars’ worth of virtual currency for ransomware actors, initial access brokers, darknet marketplace vendors, and other criminal actors for approximately the last 20 years.”

The Kremlin detailed the sweeping investigation in its announcement, stating that 148 raids were carried out in 14 constituent entities across Russia. The investigation has also found that the criminal network allegedly processed over $1 billion in 2023, amounting to more than $38 million in illegal income for the suspects.

Russia has long faced criticism for its failure to act against the vast array of cybercriminal networks operating within its borders, with many analysts suggesting the Kremlin not only tolerates but actively uses these groups to further its global influence campaigns, provided they avoid targeting Russian interests.