Ukraine police and Binance dismantled a cyber gang behind $42M money laundering

Pierluigi Paganini August 18, 2020

Ukrainian authorities arrested the members of a cybercrime gang who ran 20 cryptocurrency exchanges involved in money laundering.

Police in Ukraine announced the arrest of the members of a cybercrime gang composed of three individuals who ran 20 cryptocurrency exchanges used in money laundering activities.

According to the Ukrainian officials, the cryptocurrency exchanges allowed crooks to launder more than $42 million in funds for other criminals.

The group has been operating since 2018, on multiple cyber criminal forums they were offering to convert cryptocurrency resulting from cybercriminal activities into fiat.

The men were arrested in June, now the Binance cryptocurrency exchange and Ukraine Cyber Police shared details about the investigation in a joint report.

“The defendants created online exchangers and offered services for money laundering and money laundering. About $ 42 million in transactions took place over two years.” states the press release.

“Cyberpolice has established that three residents of Poltava region are involved in such actions. The defendants organized a criminal scheme to provide services for money laundering. Namely, money received from hacker attacks on international companies, distribution of malicious software, theft of funds from the bank accounts of foreign companies and individuals.”

The cybercrime gang collaborated with operators behind malware operations, especially gangs who spread ransomware.

Police conducted searches of the suspects’ residences and offices and seized more than $ 200,000 worth of computer equipment, weapons, ammunition and cash. The cyber agents found digital evidence of criminal activity of the suspects on the seized equipment.

“According to this fact, a criminal case under Part 2 of Art. 200 (Illegal actions with documents for transfer, payment cards and other means of access to bank accounts, electronic money, equipment for their production) and Part 2 of Article 209 (Legalization (laundering) of property obtained by criminal means) of the Criminal Code of Ukraine. The suspects face up to 8 years in prison.” concludes the press release.

The arrests are considered a success that results from the Binance internal project named “Bulletproof Exchanger,” which was launched earlier this year to identify transactions connected with illegal activities and identify bad actors behind them.

“The investigation is part of Binance’s so-called “Bulletproof Exchangers” project that aims to track down transactions between Binance and high-risk entities.” reported the CoinTelegraph.

“Investigations of this kind are primarily conducted by Binance’s internal risk intelligence unit known as Binance Sentry as well as an analytics arm, the Security Data Science division.”

Binance helped law enforcement worldwide in investigating illegal activities, in September 2019 it helped a British prosecutors‘s investigation in an online fraud that caused $51 million in losses to victims.

In late 2019, Binance signed a Memorandum of Understanding with Ukraine’s Ministry of Digital Transformation to support the Ukrainian government to developing crypto-related legislation.

Binance also partnered with TRM Labs, a blockchain analysis firm that focuses on fraud detection.

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Pierluigi Paganini

(SecurityAffairs – hacking, money laundering)

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