Authorities from Germany and the US shut down a cryptocurrency mixer today and seized a lot of Bitcoin in the process.
The mixer was allegedly used by criminals on the dark web to launder money.
With assistance from Belgian, Swiss, Polish, and US federal criminal enforcement, Europol said it disassembled the ChipMixer platform’s infrastructure, which it referred to as “one of the greatest cryptocurrency laundromats” on the dark web, and confiscated $42.2 million worth of Bitcoin.
What Is Cryptocurrency Coin Mixers?
Coin mixers gained notoriety last year when the US Treasury Department imposed sanctions on the Tornado Cash platform after alleging that it was being used by North Korean state-sponsored hackers.
The decision to target the software, which enabled anonymous Ethereum sending and receiving, infuriated the cryptocurrency community and some US legislators who argued that everyone has a right to privacy.
With a coin mixer program, users can combine several transactions to conceal the source and destination of cryptocurrency movements.
A blockchain data analyst revealed evidence that ChipMixer had been utilized by hackers who targeted the insolvent cryptocurrency exchange FTX on Twitter back in November, suggesting that it may have helped one of the biggest crypto breaches of 2022.
Once the unsuccessful cryptocurrency corporation filed for bankruptcy, hackers targeted it and stole $446 million in tokens from it.
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Attractive To Cyber Criminals
Apparently unlicensed, ChipMixer was desirable for hackers wanting to launder illicit revenues from criminal activities like drug trafficking, weapons trafficking, ransomware attacks, and credit card fraud, according to authorities.
The decision to target the software, which allowed users to transmit and receive Ethereum anonymously, infuriated the cryptocurrency industry as well as several American legislators who argued that individuals have a right to privacy.
Alexey Pertsev, the primary developer of Tornado Cash, was also detained by Dutch authorities.
But earlier this month, a preview of an update to the software, called Privacy Pools, which its creators say is sufficiently secure to avoid being blacklisted by authorities while still providing some level of privacy for cryptocurrency users, was made available.
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