Cryptocurrency’s growing role as a tool for money launderers has once again been highlighted in Brazil, where authorities recently dismantled a major scheme involving the country’s most notorious criminal organization, the First Capital Command (Primeiro Comando da Capital – PCC). FinTelegram has previously reported on the increasing use of cryptocurrencies by criminals, and this latest case underscores the urgency of addressing this evolving threat. According to a report by Insight Crime, police in São Paulo have frozen over $1.4 billion in bank accounts linked to an anti-money laundering operation targeting the PCC. The investigation, which began with the arrest of Fabiana Manzini in October 2023, led to the launch of Operation Decurio on August 6, 2024. Manzini, connected to PCC leadership through her husband, Anderson Manzini, was suspected of facilitating communication between gang members inside and outside prison. Operation Decurio resulted in the arrest of 13 suspects and the seizure of significant assets, including luxury watches and cash. However, the most significant blow to the PCC came with the freezing of billions in criminal proceeds held in bank accounts. Authorities uncovered that the PCC had been using a company posing as a cryptocurrency broker and virtual bank to launder profits from drug trafficking, with transactions totaling nearly $90 million. The criminal group attempted to establish a banking structure unauthorized by the Central Bank of Brazil, operating as if it were a legitimate financial institution. Had this effort succeeded, the PCC would have been able to bypass the mandatory reporting of suspicious transactions, severely hampering oversight. This case marks the third major crypto-based money laundering operation dismantled by Brazilian authorities in 2024 alone. Previous operations revealed similar schemes, including one involving Ronald Roland, who allegedly moved over $1 billion in criminal proceeds through cryptocurrency investments. The PCC’s reliance on cryptocurrency reflects a broader trend in Brazil, where criminals are increasingly turning to digital assets to conceal their illicit earnings. In 2024, the Federal Police have already investigated eight cases of crypto-based money laundering, nearly matching the total number from the record year of 2021. As Brazil grapples with the rapid growth of its cryptocurrency market—now the sixth-largest in the world in terms of ownership—the country’s regulatory framework struggles to keep pace. The Central Bank of Brazil is expected to introduce new regulations later this year aimed at tightening controls on the crypto market and curbing its misuse for money laundering. Report Money Laundering Activities to FinTelegram CategoriesBrazil Money Laundering tickerTagsAnderson ManziniFabiana ManziniRonald Roland

The reverse takeover of NAGA Group by the Key Way Group, owner of the CySEC-regulated reatil broker CAPEX.com, appears to have reached its final stages. Initially announced in December 2023, the merger has now received regulatory approval, with the companies expecting to close the deal by the end of August 2024. The CAPEX.com client accounts will be transferred to NAGA, the company recently announced. Under the terms of the agreement, CAPEX.com did a reverse merge into NAGA Group through a non-cash capital increase. This strategic move was designed to leverage the combined expertise and market reach of both companies. As part of the deal, CAPEX.com’s Founder and CEO, Octavian Patrascu, made a personal cash injection of $9 million into NAGA via a convertible bond, which also positioned him as the CEO of the newly merged public entity. On August 19, 2024, CAPEX.com informed its customers that their trading accounts would be transferred to NAGA by August 30th, signaling the operational integration of the two platforms. CAPEX.com and its shareholders have committed an additional $15 million in equity to the business combination, providing much-needed liquidity to NAGA, which has faced significant financial challenges in recent years. After heavy losses in 2022, NAGA managed to reduce these losses in the first half of 2023 but continues to struggle with refinancing its debt obligations. The merger is expected to generate $250 million in revenue over the next three years, with projected annual cost savings of around $10 million. The combined entity will have approximately 1.5 million registered users across more than 100 countries, with ambitious plans to increase this number to over 5 million by 2025/26. Financially, NAGA ended 2023 with €57.6 million in revenue, a 32% decline, and deepened losses of €60.9 million, up 40% from the previous year. In addition to Patrascu’s new role, the merger also led to significant leadership changes, including the departure of NAGA’s founder, Ben Bilski, three months after the merger was announced. This merger marks a critical step for NAGA and CAPEX.com as they seek to capitalize on their combined strengths and navigate the challenges of the rapidly evolving fintech landscape. Capex Key Data Trading namesCapexCapex.comNAGAClicktradesDomainshttps://nagamarkets.comhttps://capex.comhttps://clicktrades.comhttps://keywayinvestments.comhttps://www.keywayinvestments.roLegal entitiesThe Naga Group AG, GermanyNaga Markets Europe Ltd, CyprusKey Way Investments Ltd, CyprusKW Investments Ltd, SeychellesJurisdictionsCyprus, SeychellesRegulatorsCySEC for Key Way Investments Ltd with license no 292/16CySEC for Naga Markets Europe Ltd with license no 204/36FSA Seychelles for KW Investments LtdPayment optionsBank wire, alternative paymentse-walletPayment providersUnicredit Bank AG (via Payabl.cy Ltd d/b/a payabl)Astrobank Public Company LtdPayPal, Rapid, SkrillRelated individualsOctavian PatrascuConstantin PatrascuAnghel CiprianMircea UrsacheMadalina Rotaru Share Information If you have any information about Key Way Group, its brokers Capex or clicktrades, or the acting persons and partners, please share it with us via our whistleblower system, Whistle42. Share Information With FinTelegram CategoriesRetail Broker TransactionsTagsBen BilskiCapex.comNAGANaga GroupOctavian Patrascu

Google is facing legal action after a Florida woman, Maria Vaca, filed a lawsuit in a California state court, claiming that a malicious cryptocurrency wallet app downloaded from the Google Play Store resulted in the theft of $5 million in cryptocurrency. Vaca alleges that the app, named Yobit Pro, exploited Google’s portrayal of the Play Store as a secure and trustworthy platform, which led to her devastating financial loss. Vaca allegedly invested $4.6 million into the Yobit Pro app. When her balance was raised to $7 million she attempted to withdraw her money. Yobit Pro asked Vaca to pay $500,000 in “taxes,” which Vaca evidently did. When Vaca refused to pay the money, she says she was contacted by the unidentified cyber-criminals who threatened to kill her if she didn’t invest the money. The lawsuit raises significant concerns about Google’s responsibility in preventing such fraudulent apps from being available on its platform. Despite the company’s stated efforts to restrict and regulate advertising from scammers and illegal businesses, Vaca’s case suggests that these measures are insufficient. The persistence of such malicious apps on the Play Store indicates potential gaps in Google’s app vetting process and overall platform security. Vaca’s complaint includes claims of negligence, promissory estoppel, and violations of California’s false advertising and consumer protection laws. She argues that Google failed to live up to its promises of a secure platform, thereby contributing to her loss. This case underscores the growing issue of cybercriminals exploiting cryptocurrencies to defraud individuals, and it highlights the urgent need for more stringent regulations and oversight within the crypto industry. As more consumers fall victim to such scams, the pressure mounts on tech giants like Google to enhance their security measures and prevent the proliferation of fraudulent apps on their platforms. Report Crypto Crime to FinTelegram CategoriesCourt Cases Crypto SchemesTagsGoogleMaria Vaca

Recently, the arrest of an Indian victim of the global crypto Ponzi scheme BitConnect has attracted attention. The victim, Shailesh Babulal Bhatt, had lost money in BitConnect and subsequently Bhatt kidnapped two employees of BitConnect founder Satish Kumbhani and successfully extorted $148 million worth of Bitcoins. Especially in the aftermath of the second Bitcoin Halving in 2016, crypto Ponzi schemes defrauded millions of naïve investors out of billions. Here is our report. Introduction Cryptocurrencies, with their decentralized nature and promise of high returns, have become an attractive tool for operators of Ponzi schemes, particularly those structured as multi-level marketing (MLM) schemes. These schemes often lure investors with the promise of quick riches, leveraging the complexity and perceived legitimacy of cryptocurrencies to obscure their fraudulent nature. The rise of supposedly revolutionary algorithm-based trading bots has further facilitated these schemes, making it easier for operators to display fake profits on investors’ dashboards, thus sustaining the illusion of profitability. Working Hypothesis Cryptocurrencies are appealing to Ponzi and MLM scheme operators due to several key factors: Anonymity and Decentralization: Cryptocurrencies offer a level of anonymity and decentralization that traditional financial systems do not, making it difficult for authorities to trace and recover funds. Complexity and Lack of Regulation: The complexity of blockchain technology and the lack of robust regulation in many jurisdictions make it easier for fraudsters to operate without immediate detection. Ease of Creating Fake Profits: The use of algorithm-based trading bots and the manipulation of cryptocurrency prices allow operators to easily create fake profits on investors’ dashboards, thus perpetuating the fraud. Major Crypto Ponzi Schemes: Comparative Analysis 1. OneCoin Estimated Losses: $4.4 billion Estimated Number of Victims: 3 million Overview: OneCoin, co-founded by Ruja Ignatova, also known as the Crypto Queen, in 2014, was marketed as a revolutionary cryptocurrency, but it lacked a functional blockchain. The scheme promised high returns to investors through the sale of educational packages that supposedly included tokens for mining OneCoin. However, the value of OneCoin was entirely fabricated, and the scheme was revealed to be a massive Ponzi operation. Legal Actions: Ignatova disappeared in 2017, and several high-ranking members were arrested. The U.S. Department of Justice indicted Ignatova, but she remains at large. Co-founder Karl Sebastian Greenwood was sentenced to 20 years in prison. The U.S. lawyer Mark S. Scott was sentenced to 10 years in prison over money laundering for OneCoin. 2. BitConnect Estimated Losses: $2.4 billion Estimated Number of Victims: 1.5 million Overview: Launched in 2016, BitConnect offered a lending platform where investors could earn high returns by lending their Bitcoin, supposedly profiting from a trading bot. However, BitConnect’s returns were unsustainable, and the platform collapsed in January 2018, with its token’s value plummeting from $463 to below $1 within hours. Legal Actions: BitConnect was shut down by regulators in multiple countries. The U.S. SEC and the DOJ filed charges against the founder Satish Kumbhani and several promoters, and India’s Enforcement Directorate arrested key figures involved in the scheme. However, Kumbhani remains at large. Recently, the Indian BitConnect victim Shailesh Babulal Bhatt was arrested over the kidnapping of two employees of Kumbhani and the successful extortion of approximately $148 million. 3. PlusToken Estimated Losses: $2 billion Estimated Number of Victims: 3 million Overview: PlusToken, which started in 2018, was presented as a high-yield investment program that promised daily returns. The scheme attracted millions of investors, particularly in Asia, before it collapsed in mid-2019. Operators of the scheme stole around $2 billion in cryptocurrencies before disappearing. Legal Actions: Chinese authorities arrested and prosecuted several individuals involved in the operation, and significant amounts of stolen cryptocurrencies were recovered. Comparative Analysis SchemeEstimated LossesEstimated VictimsKey OperatorsLegal ActionsOneCoin$4.4 billion3 millionRuja IgnatovaKarl Sebastian GreenwoodMark S. ScottSeveral arrests; Ignatova remains at largeBitConnect$2.4 billion1.5 millionSatish KumbhaniU.S. SEC charges; arrests in India, Satish Kumbhani remains at largePlusToken$2 billion3 millionMultiple OperatorsArrests and prosecutions in China; partial recovery of funds Summary Assessment The use of cryptocurrencies in Ponzi schemes has proven to be highly effective for fraudsters due to the combination of anonymity, lack of regulation, and the technical complexity of blockchain technology. These factors allow operators to sustain the illusion of profitability and evade detection longer than traditional Ponzi schemes. As seen in the cases of OneCoin, BitConnect, and PlusToken, millions of victims have lost billions of dollars, highlighting the significant risks associated with investing in unregulated cryptocurrency schemes. Legal actions have been taken against the operators of these schemes, but the global and decentralized nature of cryptocurrencies complicates enforcement and recovery efforts. The substantial losses and widespread impact of these scams underscore the need for greater regulatory oversight and public awareness to protect investors from similar schemes in the future. Cryptocurrencies have the potential to revolutionize finance, but without adequate safeguards, they also offer a potent tool for fraudsters. As the crypto space continues to evolve, so too must the efforts to detect, prevent, and prosecute those who exploit this technology for criminal gain. Report Crypto Crime to FinTelegram CategoriesCrypto Schemes MLM SchemesTagsBitConnectKarl Sebastian GreenwoodMark S. ScottOnecoinPlusTokenRuja IgnatovaSatish Kumbhani

This is a Bollywood story: The Indian Enforcement Directorate (ED) announced the arrest of Shailesh Babulal Bhatt, a Gujarat resident, in connection with a massive cryptocurrency extortion case valued at over ₹1,200 crore (approximately $148 million). Bhatt, who has a history of involvement in kidnapping and extortion incidents, was apprehended. He is one of the many victims of the notorious $2.4-Billion BitConnect crypto Ponzi scheme. The case traces back to the notorious collapse of the crypto-based Ponzi scheme Bitconnect that lured investors in 2016-18 with promises of high returns. Allegedly, the scheme obtained approximately $2.4 billion from investors. Bitconnect promised extraordinary returns on investments, sometimes up to 40% per month, luring investors from across the globe. These promises were substantiated by the alleged Bitconnect Trading Bot, a supposed algorithmic trader that proficiently capitalized on Bitcoin’s price volatility. However, in January 2018, the platform’s founder, the Indian citizen Satish Kumbhani, 38, abruptly shut it down, vanishing with investors’ funds. In February 2022, the U.S. DOJ filed charges against Kumbhani, but he is still on the run. Among the BitConnect victims was Bhatt, who had invested a substantial amount in Bitconnect. In response to his financial losses, Bhatt took extreme measures to recover his funds, including allegedly kidnapping two of Kumbhani’s employees and extorting cryptocurrency and cash from them. In a drastic attempt to recover his lost money, Shailesh Babulal Bhatt allegedly resorted to kidnapping two employees of Kumbhani. According to the ED, Bhatt demanded and successfully extorted 2,091 Bitcoins (valued at approximately $125 million), 11,000 Litecoins, and ₹14.50 crore in cash, now totaling a staggering ₹1,232.50 crore ($146 million). Further investigations revealed that Bhatt did not act alone. He reportedly distributed ₹289 crore ($1.7 million) of the extorted money among his accomplices, who played crucial roles in executing the kidnappings and extortion. The ill-gotten gains were then used to purchase properties, gold, and other high-value assets. This case underscores the growing concerns over the misuse of cryptocurrencies in criminal activities and the need for stringent regulatory oversight to prevent such incidents in the future. Report Cybercrime to FinTelegram CategoriesCrypto Schemes Cybercrime Ponzi tickerTagsBitConnectSatish KumbhaniShailesh Babulal Bhatt

Cybercrime certainly is part of the DNA of the global networked society and crypto is an essential tool for criminals. A recent report from Chainalysis reveals a mixed picture of the current state of cybercrime within the crypto space. While overall illicit activity on the blockchain has decreased by nearly 20% year-to-date, specific categories such as stolen funds and ransomware are seeing alarming increases, signaling a shift in the tactics of cybercriminals. Key Findings Despite a general decline in illicit transactions, the amount of cryptocurrency stolen through hacks has nearly doubled, surging from $857 million to $1.58 billion. This rise is largely driven by sophisticated attacks on centralized exchanges, as cybercriminals shift away from decentralized finance (DeFi) protocols. A notable portion of these thefts involves Bitcoin, which now accounts for 40% of the transaction volume linked to stolen funds. Advanced cybercriminals, including those linked to North Korea, are increasingly using off-chain methods like social engineering to infiltrate crypto services and steal assets. Ransomware, another growing threat, is on track to make 2024 the highest-grossing year yet for ransomware payments. The report highlights a significant increase in both the frequency and scale of these attacks, with the median ransom payment for severe strains spiking from under $200,000 in early 2023 to $1.5 million by mid-2024. The largest ransomware payment ever recorded, approximately $75 million, was made this year to the Dark Angels group. Despite law enforcement efforts that disrupted major ransomware operators like ALPHV/BlackCat and LockBit, the ecosystem has fragmented, leading to the emergence of new, highly effective ransomware strains. Conclusion While the broader crypto ecosystem is witnessing a decline in illicit activity, the rise in ransomware and stolen funds underscores the evolving tactics of cybercriminals. These developments highlight the ongoing need for enhanced security measures and law enforcement interventions to curb the growing threats posed by sophisticated cybercriminal networks. Report Cybercrime Activities to FinTelegram CategoriesCybercrime Ransomware tickerTagsALPHV/BlackCatDark AngelsLockBit

B90 Holdings (previously Veltyco Group) continues to face significant challenges stemming from its controversial history under the leadership of its late co-founder and former CEO, Uwe Lenhoff, who passed away in prison in 2020. The AIM-listed company acted as a marketing machine for a global cybercrime network operating online trading and online lottery scams. Recent share transactions have brought renewed attention to the company and its shareholders. Background: B90 Holdings, formerly known as Veltyco Group, has a tumultuous history marked by serious legal issues involving its former leadership. Co-founder and former CEO Uwe Lenhoff was arrested in early 2019 on charges of investment fraud and money laundering. Following Lenhoff’s arrest, authorities have also sought Hans Dahlgren, a former director of Veltyco, who is wanted in connection with the company’s fraudulent activities. Additionally, former non-executive director Ilan Tzorya was sentenced to eight years in prison for his role in the Veltyco network, although his sentence is currently under appeal. Other key figures, such as Betim Tasholli, have also faced prosecution and arrest for their involvement. The case surrounding Veltyco remains open, with the former management held accountable for defrauding tens of thousands of victims and causing hundreds of millions in damages. After Lenhoff’s death in prison, the company rebranded as B90 Holdings in an effort to distance itself from its troubled past. On August 2, 2024, Ronny Breivik, the Executive Chairman of B90 Holdings, increased his stake in the company by purchasing 49,166 ordinary shares at a price of 3.00 pence per share. This acquisition brought Breivik’s total direct and indirect holdings to 31,049,975 shares, representing approximately 7.06% of the company’s issued ordinary share capital. Read our Veltyco Group reports here. Just days later, on August 8, major shareholder Funko International AB significantly reduced its stake in B90 Holdings, decreasing its ownership from 6.7% to under 3% through a series of share transactions. Funko International had originally acquired these shares as part of a share purchase agreement when B90 Holdings acquired the entire share capital of Emwys AB, a Swedish marketing company specializing in pay-per-click (PPC) marketing within the online gaming sector. The transaction involved an initial payment of €500,000 in cash and €250,000 in convertible notes, followed by a settlement of €1.25 million in cash and €1.6 million in B90 shares, resulting in Funko International receiving 25,271,308 new ordinary shares as consideration. Notably, B90 Holdings has not disclosed the identity of the purchaser of the shares sold by Funko International. Share Information with FinTelegram CategoriesFinancial Data tickerTagsEmwysFunko InternationalRonny BreivikUwe Lenhoff

Roman Sterlingov, the founder of the cryptocurrency mixing service Bitcoin Fog, is seeking a reduced sentence after being convicted of money laundering and related charges. In a recent filing with the U.S. District Court for the District of Columbia, Sterlingov’s legal team argued that the government’s proposed sentence of 20 to 30 years in prison is disproportionately harsh, especially when compared to similar cases within the digital currency sphere. A Call for Fairness in Sentencing On August 15, Sterlingov’s defense attorneys submitted a formal request for leniency, emphasizing that the length of the sentence recommended by prosecutors far exceeds what is typical in comparable cases. The defense argues that such a lengthy prison term would be unjust, particularly given the nature of the evidence that led to Sterlingov’s conviction. Roman Sterlingov, a citizen of Russia and Sweden, was found guilty in March 2024 of multiple charges, including money laundering, conspiracy, and operating an unlicensed money transmission business. Prosecutors allege that Bitcoin Fog facilitated the laundering of approximately $400 million worth of Bitcoin tied to illegal activities, ranging from drug trafficking to identity theft, over a decade-long period between 2011 and 2021. Circumstantial Evidence and Questions of Control A critical aspect of Sterlingov’s defense revolves around the nature of the evidence presented against him. The defense team has pointed out that much of the evidence is circumstantial, lacking direct proof that Sterlingov had operational control over Bitcoin Fog. They argue that the prosecution failed to produce definitive evidence, such as server logs or private keys, that would unequivocally tie Sterlingov to the daily management of the mixing service. According to Sterlingov’s attorneys, this lack of concrete evidence should weigh heavily in favor of a lighter sentence. The defense also highlighted Sterlingov’s personal background, noting his dedication to his family and his positive contributions to his community as factors that should be considered during sentencing. Delays and Asset Forfeiture Complications Adding to the complexity of Sterlingov’s case, his sentencing has been delayed to address unresolved issues related to asset forfeiture. Specifically, the court must determine the fate of over 1,300 Bitcoin stored in a wallet allegedly connected to Bitcoin Fog. The resolution of these asset forfeiture questions could have significant financial implications, not only for Sterlingov but also for ongoing efforts to recover funds linked to illicit activities. The outcome of this case will likely have a lasting impact on how courts handle similar cases in the future, particularly as the legal system continues to adapt to the unique challenges posed by digital currencies and decentralized platforms. Report Money Laundering Activities to FinTelegram CategoriesCourt Cases Crypto Schemes Money Laundering United StatesTagsBitcoin FodBitcoin FogRoman Sterlingov

Scammers are a permanent threat in today’s networked environment. In a recent alarming incident, a Coinbase user from Connecticut lost over $100,000 to cybercriminals in just 20 minutes after mistakenly contacting a fraudulent customer support number. Fortune reported this case, which highlights the increasing sophistication of scams targeting crypto investors and serves as a crucial warning for the entire investment community. The Growing Threat of Fake Customer Support Ads Fred, a crypto investor in his 60s, experienced difficulties accessing his Coinbase account and decided to seek help. Searching for Coinbase‘s customer support on Google, he clicked on a prominent ad that displayed a phone number. Unbeknownst to him, this number connected him not to Coinbase but to a group of scammers posing as the company’s representatives. During the call, the fake representative, who spoke with an Indian accent, convinced Fred that his account required an update. Under the pretense of assisting him, the scammer managed to extract Fred’s Coinbase password and persuaded him to open his online banking portal. The deception was only cut short when Fred received a call from Wells Fargo alerting him to unusual account activity. Within 20 minutes, Fred’s accounts were drained of Bitcoin, Ethereum, and cash, amounting to more than $100,000. The scammers swiftly transferred the funds to their own accounts, leaving Fred to grapple with the devastating financial loss. Fred’s case is not an isolated incident. It underscores a broader and troubling trend in which cybercriminals exploit Google ads to deceive users. These fraudulent ads often mimic legitimate services, luring victims into a false sense of security. In another reported case, a crypto user sought to utilize “Superbridge,” a service for converting lesser-known cryptocurrencies. A Google search led the user to click on an ad for what appeared to be Superbridge’s legitimate website. However, the link redirected to a fake site, resulting in the loss of $3,000 worth of USDC stablecoin. The subtlety of these scams—such as slightly altering a web address—makes them particularly dangerous, as even experienced users can fall victim. Google’s Response and Ongoing Risks Google has acknowledged the problem and stated that it removed the fraudulent ads and suspended the associated advertiser accounts. The company claims it is vigilant in combating such scams, having suspended 12.7 million advertiser accounts in 2023 alone. Despite these efforts, the persistence and sophistication of cybercriminals, who employ tactics like “cloaking” to evade detection, pose ongoing risks. The systemic nature of these scams, particularly within the crypto space, suggests that the problem may be more widespread than individual cases like Fred’s indicate. Investors should exercise extreme caution when searching for customer support or conducting transactions online. Recommendations for Investors Verify Contact Information: Always use official websites or verified sources to find customer support contact information. Avoid relying on search engine ads, which can be manipulated by scammers. Double-Check URLs: Before entering any sensitive information, verify that the website address is correct and secure. Be wary of slight misspellings or altered domain names. Enable Two-Factor Authentication: Use two-factor authentication (2FA) for all accounts, particularly those related to financial transactions, to add an extra layer of security. Be Skeptical of Unsolicited Requests: Never share passwords or access to online banking portals over the phone, especially if the call was unsolicited. Conclusion Fred’s experience serves as a stark reminder of the vulnerabilities that exist in the digital space, particularly for those involved in cryptocurrency investments. While Google and other platforms work to combat these scams, the responsibility ultimately lies with individual investors to remain vigilant and take proactive steps to protect their assets. FinTelegram urges all investors to stay informed about the latest cybercrime tactics and to adopt stringent security measures. By doing so, you can reduce the risk of falling victim to increasingly sophisticated scams in the ever-evolving digital landscape. Report Scammers to FinTelegram CategoriesCybercrime CyberscamsTagsCoinbase

Two individuals, Mohammad “Moe” Diab and Amy Rountree, have pleaded guilty to their involvement in a massive bank fraud conspiracy that processed over $150 million in credit and debit card payments for merchants engaged in prohibited and high-risk businesses. Diab and Rountree were charged along with co-defendants Thomas Wells and Ahmad “Andy” Khawaja. Wells pleaded guilty to wire fraud conspiracy in October 2021 and is awaiting sentencing. Khawaja is a fugitive. Key Takeaways: High-Risk Transactions: The conspiracy involved processing over $150 million in transactions via Los Angeles-based payment processor Allied Wallet for prohibited and high-risk businesses through fraudulent means. Guilty Pleas: Mohammad Diab and Amy Rountree, both former executives at Allied Wallet, have pleaded guilty to bank fraud conspiracy charges. Thomas Wells, a co-defendant, pleaded guilty to wire fraud conspiracy in 2021, while Rudy Dekermenjian pleaded guilty in 2020 to related charges. Ahmad Khawaja remains a fugitive. Deceptive Practices: The scheme used shell companies, fake websites, and miscategorized transaction codes to deceive financial institutions and payment card networks. Penalties: The charge of bank fraud conspiracy carries a sentence of up to 30 years in prison, five years of supervised release, a fine of $1 million or twice the gross gain or loss, forfeiture, and restitution. This case highlights the ongoing risks in the payment processing industry, particularly involving high-risk businesses and the sophisticated methods used to circumvent regulatory safeguards. The Case Narrative Mohammad “Moe” Diab, 48, and Amy Rountree, 41, both former executives at Allied Wallet, Inc., a Los Angeles-based payment processing company, admitted to conspiring to deceive financial institutions into processing transactions that would otherwise have been rejected. They pleaded guilty to one count of bank fraud conspiracy before United States District Judge Nathaniel M. Gorton. Their sentencing hearings are scheduled for November 2024. Fugitive Allied Wallet founder Andy Khawaja According to the indictment, Allied Wallet executives secured payment processing for high-risk businesses through fraudulent misrepresentations about merchant clients. Ahmad “Andy” Khawaja, a dual American and Lebanese citizen, served as Allied Wallet’s owner and CEO, Diab as the COO, and Rountree as VP of Operations. The conspiracy involved creating shell companies and fake websites and using deceptive coding practices to disguise the true nature of the transactions, thus tricking banks and payment card networks like Visa, Mastercard, and American Express into processing transactions for high-risk or prohibited merchants. The scheme operated from 2020 to 2024 and facilitated over $150 million in transactions through over 100 fraudulent merchant accounts. These accounts were created to circumvent fraud detection and compliance checks, allowing merchants previously terminated for fraud or other violations to continue processing payments. Read our reports on the Allied Wallet case here. In addition to Diab and Rountree, several other individuals were implicated in the conspiracy: Ahmad Khawaja remains a fugitive, facing charges not only in this case but also in a separate 2019 indictment for campaign finance violations and obstruction of justice; Thomas Wells, 77, a co-defendant, pleaded guilty to wire fraud conspiracy in 2021; Rudy Dekermenjian pleaded guilty in 2020 to related charges. The charge of bank fraud conspiracy carries a potential sentence of up to 30 years in prison, along with significant fines and restitution obligations. Report Money Laundering to FinTelegram CategoriesBank Fraud Money Laundering ticker

In Singapore’s vast billion-dollar money laundering case, two former bank relationship managers and a driver have been charged with aiding the culprits in handling illicit funds and covering up their tracks. The charges come after the original 10 offenders, who laundered illegal proceeds from Southeast Asian gambling centers into luxury goods and properties in Singapore, have served their sentences and been deported. They were sentenced to between 13 and 17 months in jail. The New Charges The newly charged individuals are bank relationship managers and Chinese nationals Wang Qiming, 26, and Liu Kai, 35, as well as Singaporean Liew Yik Kit, 41, who was the personal driver to wanted man Su Binghai. They will be charged in court on Aug 15, 2024 with various offences linked to one of the country’s largest money laundering cases. Two of them are former bank relationship managers who counted convicted criminals Su Baolin, Vang Shuiming and Lin Baoying among their clients.  Charges Against Wang Qiming Wang Qiming faces 10 charges, including forgery, money laundering, and obstructing justice. As a former relationship manager, Wang allegedly held S$481,678 in laundered cash for one of the key figures, Su Baolin (report here), and forged bank documents to facilitate nearly S$1 million in deposits. Among the allegations: Forging remittance receipts and loan agreements to deceive Citibank Singapore into accepting substantial deposits into accounts linked to the laundering scheme. Possessing significant sums of criminal proceeds. Attempting to obstruct justice by deleting evidence and lying to immigration authorities about his passport. Charges Against Liu Kai Liu Kai, formerly with Bank Julius Baer & Co, is accused of assisting another key player, Lin Baoying (report here) by submitting a forged Chinese tax document to help her open a Swiss bank account. Liu’s involvement further highlights the international scope of the money laundering operation, which relied heavily on sophisticated financial maneuvers. Charges Against Liew Yik Kit Liew Yik Kit, the sole Singaporean among the three, was charged with obstructing justice and lying to the police. As the driver for Su Binghai, who remains at large, Liew allegedly disposed of four luxury cars belonging to Su, including two Rolls Royces and two Ferraris. He is also accused of lying to the police about Su’s possessions. Legal Implications If convicted, the men face severe penalties: Lying to the police: Up to two years in jail, a fine, or both. Obstructing justice: Up to seven years in jail, a fine, or both. Forgery and using forged documents: Up to 10 years in jail and a fine. Possessing criminal proceeds: Up to three years in jail, a fine of up to S$150,000, or both. The case underscores the extensive network of individuals involved in enabling the laundering of illicit funds and the significant legal consequences for those who facilitate such crimes. The three men are scheduled to return to court next month as the investigation continues. Report Money Laundering Issues to FinTelegram CategoriesMoney Laundering

In a move reminiscent of the last crypto bull market 2020/2021, Crypto.com has signed a high-profile sponsorship deal with UEFA, the governing body of European football. This partnership, which will see Crypto.com prominently featured in UEFA events, mirrors similar recent deals by major crypto platforms, suggesting that the market may be approaching another peak. Crypto investors should be alerted. Crypto exchange Kraken signed a deal with Tottenham Hotspurs The timing of this surge in sports sponsorships is notable. Crypto.com’s deal with UEFA comes on the heels of BitPanda’s partnership with AC Milan, as reported recently by FinTelegram. In addition, Kraken, a leading U.S. crypto exchange, made headlines in July 2024 by becoming the sleeve sponsor for both Tottenham Hotspur in the UK’s Premier League and Atlético Madrid in Spain’s La Liga. These sponsorships evoke memories of the last major crypto bull run, which was marked by a wave of similar high-profile deals following the Bitcoin halving in 2020. At that time, the market soared, buoyed by a frenzy of retail and institutional interest, and sports sponsorships were a hallmark of this exuberance. However, by November 2021, crypto prices began to decline sharply, signaling the end of the bull run and the onset of the crypto winter of 2022/23, which was characterized by significant collapses and bankruptcies across the industry. The current wave of sponsorship deals could be interpreted as a sign that the market is once again nearing a peak. Historically, such aggressive marketing moves have coincided with the apex of market cycles, followed by significant downturns. As companies like Crypto.com, BitPanda, and Kraken ramp up their visibility through sports partnerships, it may indicate that the market is reaching an overheated state. For crypto investors, this should serve as a cautionary signal. While the allure of a booming market is strong, the lessons from the previous cycle suggest that these sponsorships may be more than just marketing—they could be the harbingers of an impending market correction. Keeping a close watch on these developments is crucial as the market dynamics unfold. In conclusion, while these sponsorships add visibility and credibility to the crypto industry, they also serve as potential indicators of market exuberance. Investors should approach this phase with both optimism and caution, mindful of the historical patterns that have preceded significant market shifts. Share Information with FinTelegram CategoriesCrypto Crypto SchemesTagsAC MilanAtletico MadridBitPandaCrypto.comKrakenTottenham Hotspurs

Binance, the world’s largest crypto exchange, is a sort of natural enemy for regulators worldwide. Recently, the crypto exchange agreed to pay 9.6 million reais ($1.76 million) to the Brazilian Securities and Exchange Commission (CVM) to settle a probe into its unauthorized offering of derivatives trading services in Brazil. This settlement marks a resolution in a case that has seen the exchange at odds with Brazilian regulators for several years. The CVM concluded that Binance had been providing derivatives trading services to Brazilian residents without securing the necessary licenses, in violation of the country’s securities regulations. This settlement comes after a prolonged investigation and negotiations between Binance and the CVM, which initially ordered the exchange to cease its operations in this sector back in July 2020. At that time, the CVM had threatened Binance with a daily fine of 1,000 reais if it continued to offer these services without proper authorization. In August 2023, Binance attempted to settle the matter by proposing a payment of 2 million reais ($370,000), but the CVM rejected this offer, deeming it insufficient. The final settlement, reached in February 2024, required Binance to pay a significantly higher amount, reflecting the severity of the violations. This settlement with the CVM is part of a broader pattern of regulatory challenges that Binance has faced globally. In Canada, the Financial Transactions and Reports Analysis Centre (FINTRAC) imposed a C$6 million ($4.3 million) fine on Binance in May 2024 for failing to register as a foreign money services business and for not reporting large virtual currency transactions exceeding $10,000. Similarly, in India, the Financial Intelligence Unit (FIU) fined Binance $2.25 million in January 2024 for violations related to anti-money laundering (AML) regulations. These penalties underscore the increasing scrutiny that Binance and other major crypto platforms are facing from regulators worldwide. The exchange’s settlement with the CVM serves as a reminder that even the largest players in the crypto industry must navigate complex regulatory landscapes and comply with local laws to avoid significant financial and legal consequences. Share Information with FinTelegram CategoriesCrypto Compliance Crypto SchemesTagsBinance

The U.S. Securities and Exchange Commission (SEC) has taken decisive action against Atlanta-based Drive Planning LLC and its founder, Russell Todd Burkhalter, for orchestrating a $300 million Ponzi scheme that defrauded more than 2,000 investors. The SEC has obtained a preliminary injunction, an asset freeze, and other emergency relief measures to prevent further harm to investors, while a receiver has been appointed to oversee the operations of Drive Planning. Key Points: Massive Ponzi Scheme: Drive Planning LLC and its founder defrauded over 2,000 investors out of $300 million. Lavish Spending: Burkhalter misappropriated investor funds to finance a luxurious lifestyle, including yachts, private jets, and luxury properties. SEC Action: The SEC has obtained emergency relief and seeks further legal measures to hold Burkhalter and his associates accountable. Investors are reminded to exercise caution and thoroughly vet investment opportunities, especially those that promise unusually high returns. The Case Narrative According to the SEC’s complaint, Drive Planning and Russell Todd Burkhalter lured investors by promising extraordinary returns on purported real estate investments. From 2020 through at least June 2024, the defendants raised over $300 million by convincing investors that their funds would be used for land development projects. The scheme promised a 10% interest return every three months, leading many investors to deplete their savings, retirement accounts, and even open lines of credit to participate. From 2020 through at least June 2024, Defendant Russell Todd Burkhalter (“Burkhalter”) ran a Ponzi scheme through his business, Drive Planning, LLC (“Drive Planning”), selling unregistered securities in the form of “Real Estate Acceleration Loans” (“REAL”), which Burkhalter described in promotional materials as a “bridge loan opportunity promising 10% in 3 months.” As of the end of June 2024, over 2,000 investors had invested more than $300,000,000 in REAL. (SEC Complaint) However, the SEC alleges that Drive Planning was a facade, with no legitimate business operations capable of generating the promised returns. Instead, Burkhalter used new investor funds to pay off earlier investors, creating the illusion of a successful investment while siphoning millions for his personal luxury. The complaint details Burkhalter’s extravagant spending, including the purchase of a $3.1 million yacht, $4.6 million on private jets and luxury car services, and $2 million on a luxury condominium. The SEC has charged Drive Planning and Burkhalter with violating federal securities laws’ antifraud provisions. In addition to the emergency relief, the SEC seeks permanent injunctions, disgorgement of ill-gotten gains, civil penalties, and a bar against Burkhalter from serving as an officer or director of any public company. Burkhalter’s spouse, Jacqueline Burkhalter, and several related entities are also named as relief defendants, with the SEC seeking to recover the funds they received. Report Financial Crime Activities to FinTelegram CategoriesPonzi SEC United StatesTagsDrive PlanningJacqueline BurkhalterRussell Todd Burkhalter

The Austrian crypto exchange BitPanda‘s recent announcement of a strategic partnership with AC Milan, one of Europe’s most iconic football clubs, marks yet another instance of a cryptocurrency platform venturing into the world of sports sponsorship. While such high-profile partnerships may lend credibility and visibility to the crypto platform, they also raise critical questions about the underlying motives and the potential risks for investors. Sports sponsorships by financial and crypto companies are not new, but history has shown that many of these sponsors have been involved in fraudulent activities. The collapse of FTX, which was heavily involved in sports sponsorships, serves as a stark reminder of how marketing and sponsorship deals can distract from a company’s financial instability or unethical practices. Similarly, fraudulent binary options and CFD brokers like EverFX and 24Option used sports sponsorships to gain legitimacy and attract unsuspecting investors, only to later be exposed as scams. BitPanda’s partnership with AC Milan is framed as a union of shared values and a celebration of legacy and excellence. The company’s CEO, Eric Demuth, emphasizes the alignment of BitPanda’s long-term vision with that of AC Milan, claiming that both entities are committed to building lasting legacies. However, it is crucial for investors and potential clients not to be swayed by the allure of sports sponsorships. The association with a prestigious football club does not guarantee the integrity or stability of a financial platform. In the volatile world of cryptocurrencies, where regulation is still catching up with innovation, it is essential to approach such sponsorships with caution. The marketing efforts that surround these deals often aim to create a veneer of trustworthiness and success. Yet, as history has shown, these partnerships can be nothing more than a smokescreen for underlying financial misconduct. Share Information with FinTelegram CategoriesCryptoTags24optionAC MilanBitPandaEric DemuthEverFXFTX

The U.S. Financial Industry Regulatory Authority (FINRA) has identified a significant increase in the involvement of U.S. brokerage firms in the crypto sector, raising concerns about activities occurring on the fringes of regulatory oversight. According to a recent FINRA guidance, nearly 400 brokerage firms are now engaged with crypto in some capacity, though much of this activity may fall outside the organization’s direct jurisdiction. Key Takeaways: Increased Involvement: Nearly 400 U.S. brokerage firms are now involved in the crypto sector, though much of this activity may be outside FINRA’s direct oversight. Many firms conduct crypto activities through affiliates or parent companies, which are not under FINRA’s jurisdiction. Regulatory Compliance: Firms dealing with cryptoassets that are securities must comply with existing securities laws and FINRA rules. Challenges Identified: FINRA has identified challenges with supervisory, marketing, and anti-money laundering rules in the context of crypto activities. Market Abuse Risks: FINRA warns of potential market abuses, such as pump-and-dump schemes, exploiting investor interest in crypto. FINRA’s findings, based on reviews and a survey of 600 firms, reveal that 390 firms are currently involved in the crypto space. This includes firms with active crypto businesses, those planning to launch crypto ventures, and firms that have partnerships or affiliations with crypto companies. Additionally, some firms employ representatives who have disclosed outside business activities related to crypto, such as trading, mining, or operating crypto funds. The activities of these firms in the crypto sector are diverse, ranging from handling private placements and operating trading platforms to providing custody services for cryptoassets. However, FINRA noted that much of this involvement is indirect, with many crypto-related activities being conducted by affiliates or parent companies rather than the brokerage firms themselves. While FINRA maintains jurisdiction over its member firms and their associated persons, it does not extend this oversight to their affiliates or parent companies that are not member firms. This limitation poses challenges in ensuring comprehensive regulatory coverage of crypto activities. Firms and representatives within its jurisdiction must comply with existing securities laws and FINRA rules, particularly when dealing with cryptoassets that are classified as securities. The regulator also highlighted that certain FINRA rules apply to activities involving cryptoassets that are not considered securities. FINRA expressed concern over member firms encountering difficulties with various rules, including supervisory obligations, marketing regulations, and anti-money laundering requirements. The organization has already taken disciplinary actions against firms for violations related to crypto activities, including issues with due diligence, misrepresentation of investor protections, and record-keeping failures. The regulator also warned of potential market abuses, such as pump-and-dump schemes, where individuals exploit investor interest in cryptoassets and blockchain technology. Report Suspicious Crypto Activities to FinTelegram CategoriesCrypto Compliance FINRA

Maksim Silnikau, a dual-national of Belarus and Ukraine, has been extradited from Poland to the United States to face charges for his alleged role in leading international malvertising and ransomware schemes. These charges were unsealed in both the District of New Jersey and the Eastern District of Virginia, marking a significant development in the fight against global cybercrime. The Cybercrime Narrative Maksim Silnikau, also known by online aliases such as “J.P. Morgan,” “xxx,” and “lansky,” is accused of spearheading two major cybercrime operations over several years. One of the schemes involved the deployment of the Angler Exploit Kit and other malicious software to millions of unsuspecting internet users through fraudulent online advertisements—a practice known as “malvertising.” This operation allegedly ran from October 2013 to March 2022, causing significant harm to users and defrauding numerous U.S. companies. Malvertising is a technique that cybercriminals use to inject malware into users’ computers when they visit malicious websites or click on an ad online. Malvertising may also direct users to a corrupted website where their data can be stolen or malware can be downloaded onto their computer. After a user clicks on the malvertisement, code starts running in the background, causing it to potentially download malware onto the user’s computer. Malvertising comes with considerable risks that can threaten your computer, network, or mobile device, including malware infections, data theft, and system breakdowns In addition to the malvertising activities, Silnikau is charged in Virginia for his role as the creator and administrator of the Ransom Cartel ransomware, a strain of malware responsible for multiple high-profile attacks since May 2021. Silnikau is accused of developing and managing a ransomware operation that targeted companies in New York and California, among others, stealing sensitive data and demanding ransom payments to prevent its release. This case highlights the extensive reach and sophistication of international cybercrime networks and underscores the importance of global cooperation in bringing cybercriminals to justice. Key Takeaways: Extradition: Maksim Silnikau was extradited from Poland to face charges in the U.S. for leading major cybercrime operations. Cybercrime Schemes: Silnikau is accused of orchestrating a malvertising campaign and creating the Ransom Cartel ransomware strain, both of which targeted millions of users and numerous companies. Global Impact: The case demonstrates the international scope of cybercrime and the necessity of cross-border law enforcement collaboration. Legal Consequences: If convicted, Silnikau and his co-conspirators face significant prison sentences, reflecting the serious nature of their alleged crimes. This case reminds us that despite the anonymity offered by the Internet, cybercriminals can and will be held accountable for their actions. Report Cybercrime Activities to FinTelegram CategoriesCourt Cases Cybercrime United States

With the rise of blockchains and cryptocurrencies, their use for money laundering has also increased massively and has become a massive challenge for the authorities. Recent money laundering cases involving cryptocurrencies have highlighted the growing challenges and complexities associated with digital currencies in illicit activities. Here are some notable cases and insights into the role of cryptocurrencies in money laundering. Recent Money Laundering Cases Bitcoin Fog: According to the U.S. DoJ, Bitcoin Fog operated between 2011 and 2021 and allegedly moved over 1.2 million Bitcoins, valued at $400 million at the time of the transactions. In March 2024, a U.S. court convicted a dual Russian-Swedish national named Roman Sterlingov for operating Bitcoin Fog. Samurai Wallet: On April 24, 2024, the founders of Samurai Wallet, Keonne Rodriguez and William Lonergan Hill, were arrested and charged with conspiracy to commit money laundering and operating an unlicensed money service business. The U.S. DOJ claims that Samurai Wallet facilitated over $2 billion in illicit transactions from 2015 to 2024, including more than $100 million linked to dark web marketplaces. ChipMixer: This dark web Bitcoin mixing service was implicated in aiding various criminal activities, including money laundering. It utilized sophisticated techniques to obscure the origins of funds, making it difficult for law enforcement to trace illicit transactions. Tornado Cash: This service was involved in laundering funds for various criminal enterprises and was shut down by authorities due to its role in facilitating money laundering activities. In August 2023, the U.S. DoJ charged Tornado Cash co-founders Roman Storm and Roman Semenov with creating and promoting Tornado Cash. Ronin Bridge Exploit: This case involved the theft of $620 million worth of cryptocurrency, which was later laundered through various methods, including mixers and exchanges. Plus Token Ponzi Scheme: This scheme generated approximately $2.9 billion and was responsible for 64% of cryptocurrency crimes in 2019. The operators vanished after withdrawing significant amounts from the platform, leading to widespread financial losses for investors. Insights and Statistics Role of Cryptocurrencies in Money Laundering: Cryptocurrencies’ decentralized and pseudonymous nature makes them attractive for criminals looking to obscure the origins of illicit funds. Techniques such as mixers, chain hopping (converting funds across different cryptocurrencies), and nested services (using intermediaries) are commonly employed to disrupt authorities’ tracking efforts. Increased Prosecutions: The rise in cryptocurrency-related money laundering cases has led to a surge in prosecutions and investigations by law enforcement agencies. For instance, the U.S. Department of Justice has intensified its scrutiny of major exchanges like Binance and BitMEX, which have faced allegations of facilitating illegal activities. Challenges in Regulation: Regulating cryptocurrencies for anti-money laundering (AML) purposes remains a significant challenge. The anonymity provided by cryptocurrencies complicates the ability of financial institutions and law enforcement to monitor and trace illicit activities effectively. This has prompted calls for more robust regulatory frameworks to address the unique risks posed by digital currencies. Overall, the intersection of cryptocurrencies and money laundering continues to evolve, necessitating ongoing vigilance and adaptation by regulatory bodies and law enforcement agencies. Report Illegal Crypto Activities to FinTelegram CategoriesCrypto Compliance Crypto Schemes Money LaunderingTagsBitcoin FogChipMixerKeonne RodriguezPlus TokenRoman SterlingovRonin BridgeSamurai WalletWilliam Lonergan Hill

With the rapid adoption of cryptocurrencies, the global landscape of illicit businesses, particularly in the online gambling sector, has seen a significant expansion. Despite heightened regulatory scrutiny, cryptocurrencies continue to operate beyond national borders, enabling illegal online casinos and gambling platforms to thrive. This phenomenon has created substantial challenges for authorities, who often find themselves ill-equipped to counter the sophisticated mechanisms employed by these unlawful operators. Cryptocurrencies, by their decentralized and anonymous nature, have become the preferred medium of exchange for many illegal online gambling platforms. Unlike traditional payment methods, where bank details and personal information are required, cryptocurrency transactions only necessitate a crypto wallet. This shift in payment methods allows operators, often anonymous or linked to offshore companies, to circumvent regulatory provisions and financial laws with ease. The absence of a central authority in cryptocurrency transactions means that these operators can operate globally without the fear of their bank accounts being frozen or shut down. One of the most troubling aspects of this development is the elimination of charge-back claims. In traditional payment systems, customers who fall victim to fraudulent schemes or unauthorized transactions can file charge-back claims with their banks or credit card companies. However, in the crypto sector, this protective measure is virtually non-existent. Once a cryptocurrency transaction is confirmed on the blockchain, it is irreversible. This makes it exceedingly difficult, if not impossible, for customers to recover their funds once they have been sent to illegal gambling operators. Moreover, the involvement of registered payment processors such as Binance, MoonPay, Simplex, and CryptoPay in these illegal schemes further complicates the issue. These companies facilitate cryptocurrency payments for these unlawful online casinos and even offer conversion services to fiat currencies. While these processors operate within legal frameworks in many jurisdictions, their services can be exploited by illicit actors to launder money and evade legal repercussions. Read our report on CryptoPay here. A common tactic employed by these illegal gambling platforms is the integration of cryptocurrency purchases directly on their websites. Customers are encouraged to buy cryptocurrencies using their bank accounts or credit cards through registered crypto service providers like MoonPay, which are deeply integrated in the platforms of the illegal operators. However, the purchased cryptocurrencies are immediately transferred to wallets controlled by illegal gambling schemes. This setup creates a significant barrier to charge-back claims, as the cryptocurrency providers can demonstrate that the purchased cryptocurrencies were delivered to the customers’ wallets, regardless of the final destination of the funds. This structure not only facilitates the seamless operation of illegal online gambling platforms but also undermines the effectiveness of current regulatory measures designed to combat financial crimes. The anonymity and borderless nature of cryptocurrencies enable these illegal operators to continuously evade detection and prosecution, perpetuating a cycle of unlawful activity that authorities are struggling to contain. In conclusion, the increasing acceptance and use of cryptocurrencies have significantly empowered illegal online gambling operations. The anonymity, irreversibility, and global reach of cryptocurrency transactions have allowed these platforms to flourish, posing serious challenges to regulators and law enforcement agencies. Report Illegal Crypto Activities to FinTelegram CategoriesCrypto Payments Illegal gambling Illegal Payment Services tickerTagsBinaneMoonPaySimplex

Cryptocurrencies have emerged as powerful instruments in the world of money laundering, a fact that has increasingly caught the attention of federal law enforcement. As U.S. criminal defense lawyer John Helms outlined in a blog post, the innovative nature of cryptocurrencies has provided criminals with sophisticated methods to obscure the origins of illicit funds, thereby complicating law enforcement efforts. Money laundering, a crime defined under 18 U.S.C. §§ 1956 and 1957, involves the process of transforming “dirty money” from criminal activities into “clean” money that appears to be from legitimate sources. Traditionally, this has been done through cash transactions, shell companies, and international banking networks. However, the advent of cryptocurrency has introduced new techniques that make tracing illegal funds more difficult. Cryptocurrencies, like Bitcoin, are digital, decentralized mediums of exchange that record transactions on a blockchain—a public ledger accessible to anyone. Although this might seem to offer transparency, criminals have devised ways to exploit the system. Techniques such as “mixers”—services that mix multiple transactions to obscure their origins—and “chain hopping,” which involves converting funds across different cryptocurrencies, have become prevalent. These methods hinder blockchain tracing, a tool law enforcement uses to follow money trails. Recent cases, including those involving ChipMixer, Bitcoin Fog, and the notorious North Korean Lazarus Group, highlight the global scale and complexity of cryptocurrency-related money laundering schemes. These cases demonstrate how illicit funds are laundered through a combination of advanced techniques and the use of decentralized finance platforms. Defending against such charges is challenging. Prosecutors must prove that the accused knowingly engaged in laundering illegal proceeds. For defense attorneys, the key lies in challenging the prosecution’s ability to demonstrate this knowledge and intent beyond a reasonable doubt—a difficult task given the technical complexity of cryptocurrency transactions. In sum, as cryptocurrencies continue to evolve, so too do the money laundering methods, requiring both law enforcement and defense attorneys to adapt to the complexities of this digital frontier. Report Money Laundering Activities to FinTelegram CategoriesCrypto Schemes Money LaunderingTagsJohn Helms