DOJ shuts down ChipMixer over $3B of cryptocurrency money laundering DOJ shuts down ChipMixer over $3B of cryptocurrency money laundering

DOJ shuts down ChipMixer over $3B of cryptocurrency money laundering

Officials also charged one individual, Minh Quốc Nguyễn, in connection to the case.

DOJ shuts down ChipMixer over $3B of cryptocurrency money laundering

Cover art/illustration via CryptoSlate

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The U.S. Department of Justice (DOJ) has shut down the Bitcoin mixing service ChipMixer, as announced in a statement on March 15.

ChipMixer handled $3 billion of illicit crypto

The DOJ said that ChipMixer has been used to launder more than $3 billion of illicit cryptocurrency transactions since August 2017.

That total includes $17 million of ransomware transactions, $200 million of darknet market transactions, $35 million of transfers tied to fraudulent data sales, and an unspecified amount of transactions tied to a state-backed Russian malware campaign.

The DOJ also noted that the platform has been used to handle $700 million in connection to two blockchain “heists” against Ronin Bridge and Horizon Bridge.

Law enforcement in the U.S. seized two web domains that directed visitors to ChipMixer and one GitHub account that hosted project code. Police in Germany additionally seized the project’s back-end servers and $46 million worth of cryptocurrency.

One individual charged in case

One individual — Vietnam resident Minh Quốc Nguyễn — has been charged in the case.

Nguyễn launched ChipMixer in 2017 and paid for the services necessary to run the platform by using fake identities. He also promoted the service online and advocated against anti-money laundering (AML) and know-your-customer (KYC) measures.

He now faces charges of money laundering, identity theft, and operating an unlicensed money-transmitting business.

Nguyễn has been charged in Philadelphia. He potentially faces 40 years in prison.

Actions against other coin mixers

U.S. authorities have also taken measures against other coin mixers. The U.S. Treasury sanctioned the Ethereum-based coin mixer Tornado Cash in August 2022.

Prior to that, the Treasury sanctioned a lesser-known mixer called Blender in May 2022. Recent reports from blockchain surveillance firm Elliptic suggest that the platform may have been rebranded in order to operate under the name Sinbad.

Though coin mixers are used for illegal activities, enforcement actions have been met with controversy due to the fact that mixers have legitimate privacy applications.

Posted In: Crime, Regulation