Ukraine shuts down money laundering cryptocurrency exchanges


Image: Aleksi Räisä

The Security Service of Ukraine (SBU) closed a network of cryptocurrency exchanges that has been used to anonymize transactions since early 2021.

Over 1,000 “customers” used the secret exchanges to launder funds received from Russian electronic payment processors, including Yandex.Money, Qiwi and Webmoney.

“The secret cryptocurrency exchanges were in demand because they offered the anonymity of transactions and the possibility of money laundering,” said the SBU.

The monthly volume of laundered funds was $ 11 million, a tiny fraction of the billions worth of cryptocurrency assets legally transacted each month through the top 10 exchanges.

However, the administrators could still make more than $ 500,000 as they received between 5% and 10% interest on every transaction.

Police officers seized:

  • Computers and server machines with evidence of illegal activity;
  • Mobile devices with VPN software installed;
  • Seals and constitutional documents of bogus companies registered in Ukraine used for money laundering activities;
  • $ 37,330 in cash.

“Customers of the cryptocurrency exchange network included organizers of mass protests on the eve of Ukraine’s Independence Day,” added the SBU. “They received money to pay for the services of provocateurs who used this particular network.”

Image: SBU

Crypto mining farm from FIFA bots

The SBU also announced last month the closure of a huge crypto mining farm that operates in an old warehouse and stole electricity from JSC Vinnytsiaoblenerho, a Ukrainian electricity distribution company.

During their searches, law enforcement agencies seized 3,800 PlayStation 4 game consoles, more than 500 graphics cards, notebooks, phones and flash drives, as well as drafts of power consumption.

According to estimates by SBU, the large-scale electricity theft in which the crypto farm was involved resulted in monthly losses of up to around $ 260,000.

The SBU is working to identify everyone involved in the illegal operation and to investigate the involvement of JSC Vinnytsiaoblenerho officials.

Following the announcement, the power company denied the SGE’s claims of multi-million dollar electricity theft and of having been involved in cryptocurrency mining in any way.

Her statement was later confirmed by a subsequent investigation by the Ukrainian newspaper Delo. SBU sources told Delo that the crypto mining farm was actually a bot farm designed to mine in-game currency and buy loot boxes for the FIFA Ultimate Team game mode.