A much overlooked but essential part in financially motivated (cyber)crime is making sure that the origins of criminal funds are obfuscated or made to appear legitimate, a process known as money laundering. ’Cleaning’ money in this way allows the criminal to spend their loot with less chance of being caught. In the physical world, for instance, criminals move large sums of cash into offshore accounts and create shell companies to obfuscate the origins of their funds. In the cyber underground where Bitcoin is the equivalent of cash money, it works a bit differently. As Bitcoin has an open ledger on which every transaction is recorded, it makes it a bit more challenging to obfuscate funds.
When a victim pays a criminal after being extorted with ransomware, the ransom transaction in Bitcoin and all additional transactions can then be tracked through the open ledger. This makes following the money a powerful investigative technique, but criminals have come up with an inventive method to make tracking more difficult; a mixing service.
A mixing service will cut up a sum of Bitcoins into hundreds of smaller transactions and mixes different transactions from other sources for obfuscation and will pump out the input amount, minus a fee, to a certain output address. Mixing Bitcoins that are obtained legally is not a crime but, other than the mathematical exercise, there no real benefit to it.
The legality changes when a mixing service advertises itself as a successful method to avoid various anti-money laundering policies via anonymity. This is actively offering a money laundering service.
Last year advertisements for new mixing service called Bestmixer.io appeared on several Cryptocurrency related websites.
Nature of the service
Bestmixer offered a very clear page on why someone should mix their cryptocurrency. On this page, Bestmixer described the current anti-money laundering policies and how its service could help evade these policies by making funds anonymous and untraceable. Offering such a service is considered illegal in many countries.
A closer inspection of the Bestmixer site revealed that its website was hosted in the Netherlands. McAfee ATR contacted the Financial Advanced Cyber Team (FACT) of the Dutch anti-Fraud Agency (FIOD) of Bestmixer.io’s location. FACT is a team that is specialized in investigating the financial component of a (cyber)crime. A yearlong International investigation led to the takedown of Bestmixer’s infrastructure today....