US Charges 2 Russian Nationals in Crypto Money Laundering Scheme, Offers $10 Million Reward

US authorities have charged Russian citizens Sergey Sergeevich Ivanov and Timur Shakhmametov for allegedly operating a cryptocurrency money laundering service linked to Russian cybercrime.

The US State Department has issued a $10 million reward for information leading to the arrest or conviction of each.

International crackdown on Russian cybercrime

The US Treasury, in coordination with international partners, announced that it had taken steps to disrupt the operations of PM2BTC and Cryptex, two digital currency exchanges linked to large-scale money laundering operations that benefit ransomware actors and others cybercriminals operating outside of Russia.

Its Financial Crimes Enforcement Network (FinCEN) has designated PM2BTC, associated with Ivanov, as a “primary money laundering concern.” In addition, its Office of Foreign Assets Control (OFAC) has also sanctioned Ivanov and Cryptex for facilitating more than $51 million in ransomware-related transactions and $720 million in connections to Russian cybercrime.

Ivanov has been involved in Russian cybercrime for more than two decades and allegedly laundered hundreds of millions of dollars through various payment processing services, including UAPS.

Cryptex, which also operates primarily in Russia, has allegedly been involved in laundering funds for cybercriminals, including ransomware actors, fraud shops and exchanges with poor compliance programs.

Law enforcement agencies including the US Secret Service, the Dutch Police and the Dutch Fiscal Intelligence and Investigation Service (FIOD) have seized web domains and infrastructure linked to PM2BTC and Cryptex . The US Secret Service and the U.S. Attorney’s Office for the Eastern District of Virginia also released an indictment against Ivanov and Shakhmametov.

The measures are intended to safeguard national security and the financial system by preventing illicit financial institutions from accessing its market. They are part of Operation Endgame, a multinational initiative aimed at dismantling cybercriminal financial enablers.

Implications of sanctions

The OFAC sanctions freeze all assets and interests of the two suspects in the United States and prohibit any person or entity domiciled in the country from engaging with them. On the other hand, FinCEN’s order prohibits financial institutions from conducting transactions involving PM2BTC, and foreign financial institutions involved with the institutions are also at risk of sanctions.

Bradley T. Smith, Acting Under Secretary of the Treasury for Terrorism and Financial Intelligence, commented on the situation and said: “The United States and our international partners remain steadfast in our commitment to prevent the enablers of Cybercriminals like PM2BTC and Cryptex operate with impunity.”

This latest round of legal implications is part of a broader US effort to combat cybercrime in Russia. During the last year, the Treasury has sanctioned several people and groups involved in these activities.

These include members of the native hacktivist group Cyber ​​​​Army of Russia Reborn, leaders of the ransomware group LockBit and affiliates of the darknet marketplace Genesis Market, which was taken down by law enforcement in early 2023.

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