IRS-Criminal Investigation, the US Department of Justice, and the Federal Bureau of Investigation in coordination with the German Federal Criminal Police Office (BKA) and the Attorney General’s Office in Frankfurt, reportedly seized the domain for online crypto wallet Cryptonator for allegedly failing to have “appropriate” anti-money laundering controls in place and facilitating “illicit activity.” The team at TRM Labs has shared key insights on this development.
As noted in a blog post by TRM Labs, Cryptonator, launched in 2014, is an online cryptocurrency wallet that “enables direct transactions and allows instant exchange between different cryptocurrencies in one personal account, essentially acting as a personal cryptocurrency exchange.”
TRM Labs also mentioned that along with “seizing the domain, prosecutors in the Middle District of Florida charged Roman Boss for money laundering and operating an unlicensed money service business.”
According to the criminal complaint, Cryptonator did “not collect personal data, allowing customers to conceal their identities.”
TRM Labs pointed out that counter to US anti-money laundering regulations, Cryptonator allowed users “to open an account with only an email and password rather than the rigorous KYC requirements typical in onboarding at a complaint exchange.”
Based on blockchain intelligence, the government alleges “that between 2014 and 2023, cryptocurrency addresses controlled by Cryptonator completed more than 4 million transactions, totaling approximately USD 1.4 million.”
Furthermore, Bitcoin addresses controlled “by Cryptonator sent or received more than USD 25 million to or from Darknet Markets and Fraud Shops, more than USD 34.5 million to or from scam addresses, more than USD 80 million to or from high risk exchanges, more than USD 8 million to or from ransomware campaigns, more than USD 54 million to or from addresses associated with hacked or stolen funds, more than USD 34 million to or from addresses associated with mixers, and nearly USD 17 million to or from sanctioned addresses.”
This activity is visualized in TRM’s graph visualizer here.
The detailed, 29-page complaint alleges “that Boss knowingly allowed his service to be used for illicit activities including purchases on Darknet Markets including evidence based on direct communications with undercover agents.”
As noted in the update from TRM Labs, this case is said to be “an example of global law enforcement cooperation and the use of blockchain intelligence to thwart illicit activity.”
